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REPORT 


OP  THE 


COMMISSION  ON  REVENUE  AND  TAXATION 


1910. 


JAMES  N.  GILLETT,  Governor Chairman 

J.  B.  CURTIN,  State  Senator Commissioner 

CARL  C.  PLEHN Secretary 


SACRAMENTO: 

W.  W.  SHANNON,      :      :      :      :     SUPERINTENDENT  STATE  PRINTING 

1910 


TABLE  OF  CONTENTS. 


Page. 
LETTER  OF  TRANSMITTAL - 5 

INTRODUCTION. .___-.. ..„. 7 

History  of  the  Commission. 

Act  of  March  20,  1905 7 

Assembly  Concurrent  Resolution  No.  21  of  1905 _-_ 7 

Appointment  of  the  commission,  audits  work 8 

Amendment  voted  on  in  November,  1908 . 9 

The  vote  on  this  amendment 12 

The  alleged  defects  in  the  amendment 12 

The  amendment  to  be  voted  on  in  November,  1910 13 

Reorganization  of  the  commission 16 

SECTION  L 

Analysis  of  the  provisions  of  the  amendment- 18 

SECTION  II.    THE  FINDINGS. 

The  method  of  collecting  the  data 20 

The  effect  in  each  of  the  counties.    How  computed 21 

Table  I.    Effect  in  1905 22 

Table  II.    Effect  in  1908 23 

Table  III.    Effect  in  1909 24 

The  effect  on  cities 25 

On  the  suflSciency  of  state  revenues  under  the  amendment.    The  amount  needed  25 

Table  I.    Estimate  of  the  revenues  under  the  commission's  plan  in  1905 26 

Table  II.    Estimate  of  the  revenues  under  the  amendment  submitted  in  1908 26 

Table  III.    Estimate  of  the  revenues  under  tl^e  amendment  to  be  voted  on  in  1910  27 
The  accuracy  of  the  estimates. 

The  returns  from  public  service  corporations,  how  obtained 27 

The  returns  from  banks,  how  obtained 27 

The  returns  from  insurance  companies,  how  obtained 28 

The  probable  revenues  from  the  tax  on  franchises,  how  computed 28 

On  the  growth  of  these  revenues 29 

SECTION  in.      DISCUSSION  OF  THE  EFFECT  OF  THE  AMENDMENT. 

A.    Upon  LOCAL  taxation  IN  the  counties 31 

Lowers  the  taxes  on  real  estate 31 

Higher  valuations  possible  _._ 32 

No  equalization  necessary 32 

The  distribution  of  the  gains  and  losses  not  permanent 33 

The  state  pays  many  local  expenses 34 


4  CONTENTS. 

SECTION  III— Continued.  Page. 

B.    Upon  the  corpoeatigns 34 

Steam  railroads 34 

Street  railroads 35 

Power  companies ...  36 

Express  companies 36 

Car  companies 36 

Telegraph  and  telephone  companies 36 

Banks 36 

Insurance  companies ^ 37 

Franchises ' 37 

Rates - - 37 

SECTION  IV.     DEFECTS  OF  THE  PROPERTY  TAX  AND  GENERAL  ARGU- 
MENT FOR  SEPARATION. 

Faults  of  the  old  system 38 

Equalization  no  remedy 40 

Many  classes  of  property  undertaxed 40 

Meaning  of  separation 41 

Introduction  and  definition . 41 

Theoretical  considerations 42 

Practical  considerations -.  43 

Separation  in  other  states 43 

Connecticut , 44 

New  York 44 

Pennsylvania _. 44 

Virginia 44 

Wisconsin ^ 45 

SECTION  V. 

Citations  from  authorities,  etc. 46 

Conclusion 46 

The  draft  of  new  tax  laws 1 47 

SECTION  VI.     COUNTY  TABLES  IN  ALPHABETICAL  ORDER. 


office  of  the 
Commission  on  Revenue  and  Taxation. 
2308  Warring  Street, 
Berkeley. 


September  1,  1910. 

To  the  Senate  and  Assembly  of  the  State  of  California,  to  convene 

January  2, 1911. 
Gentlemen  : 

The  Commission  commonly  called  the  * '  State  Commission  on  Revenue 
and  Taxation"  has  the  honor  to  submit  to  your  honorable  body  the 
following  report. 

JAMES  N.  GILLETT,  Governor, 
Chairman. 

J.  B.  CURTIN, 

Commissioner. 

CARL  C.  PLEHN, 

Secretary. 


INTRODUCTION. 


History  of  the  Commission. 

This  commission  as  originally  constituted  was  created  by  an  act  of 
the  legislature  of  the  State  of  California,  entitled : 

An  act  authorizing  the  governor  to  appoint  an  expert  in  taxation  and  p-uhlic  f  nance, 
to  sit  as  a  meniher  of  a  commission  to  he  composed  of  himself  and  a  general  com- 
mittee of  the  senate  and  assembly  of  the  thirty-sixth  session  of  the  legislature  of 
the  State  of  California,  of  which  commission  the  governor  shall  he  ex  officio  a 
memher  and  chairman,  to  investigate  the  S'lstem  of  revenue  and  taxation  in  force 
in  this  state,  and  to  recommend  a  plan  for  the  revision  and  reform  thereof;  to  pro- 
vide for  the  creation  of  said  commission,  and  to  define  its  powers,  and  making  an 
appropriation  therefor. 

[Approved  March  20,  1905.] 

The  people  of  the  State  of  California,  represented  in  senate  and  assembly,  do  enact 

as  follows: 

Section  1.  If  and  when  the  senate  and  assembly  of  the  thirty-sixth  session  of 
the  legislature  of  the  State  of  California  shall  provide  for  the  appointment,  and 
there  shall  be  appointed  pursuant  to  said  provision,  a  joint  committee  of  said  senate 
and  assembly  to  investigate  the  system  of  revenue  and  taxation  in  force  in  this  state, 
and  to  recommend  a  plan  for  the  revision  and  reform  thereof,  the  governor  is  author- 
ized to  appoint  an  expert  in  taxation  and  public  finance,  to  sit  with  said  committee, 
and  with  said  committee  to  constitute  a  commission  upon  the  revision  and  reform  of 
the  system  of  revenue  and  taxation  in  force  in  this  state.  The  governor  shall  be 
ex  oflScio  a  member  of  said  commission  and  shall  be  chairman  thereof. 

Sec.  2.     Said  expert  shall  hold  his  office  at  the  pleasure  of  the  governor. 

Sec.  3.  The  compensation  of  said  expert  shall  be  fixed  by  the  said  commission  in 
an  amount  not  to  exceed  two  hundred  and  fifty  dollars  per  month. 

Sec.  4.  Said  commission  is  authorized  and  empowered  to  do  any  and  all  things 
necessary  to  make  a  full  and  complete  investigation  of  the  matters  and  things  here- 
inabove enumerated,  and  to  that  end  to  employ  all  necessary  clerical  and  expert 
assistance,  and  that  said  commission  be  and  it  hereby  is  authorized  and  empowered 
to  send  for  persons  and  papers,  and  to  take  all  necessary  means  to  procure  the 
attendance  of  witnesses  and  testimony ;  and  the  members  of  said  commission  are, 
and  each  of  them  is,  hereby  authorized  to  administer  oaths ;  and  that  all  the  pro- 
visions of  article  eight,  of  chapter  two,  title  one,  part  three  of  the  Political  Code 
of  this  state,  relative  to  the  "attendance  and  examination  of  witnesses  before  the 
legislature  and  committees  thereof,"  shall  apply  to  the  commission ;  and  that  the 
sergeant-at-arms  of  either  the  senate  or  the  assembly  is  hereby  authorized  and 
directed  to  serve  [any]  and  all  subpoenas  and  orders  or  other  process  that  may  be 
issued  by  the  chairman  of  said  commission,  when  directed  to  do  so  by  the  said  chair- 
man. 

Sec.  5.  The  members  of  said  commission,  other  than  the  chairman  and  the' mem- 
ber appointed  by  the  governor,  shall  be  paid  the  sum  of  ten  dollars  ($10.)  per  diem 
and  their  necessary  expenses,  while  actually  engaged  in  the  performance  of  their 
duties  as  prescribed  in  this  act. 

Sec.  6.  There  is  hereby  appropriated  out  of  the  general  fund,  not  otherwise 
appropriated,  the  sum  of  ten  thousand  dollars,  or  so  much  thereof  as  may  be  neces- 
sary, for  the  purposes  of  this  act. 

Sec.  7.     This  act  shall  take  effect  immediately. 

As  provided  in  the  above  act,  the  legislature  of  1905  adopted  Assembly 

Concurrent  Resolution  No.  21,  as  follows : 

Resolved  by  the  assembly  of  the  State  of  California,  the  senate  concurring.  That  a 
joint  committee  of  the  senate  and  assembly,  consisting  of  four  members,  be  appointed, 
two  by  the  president  of  the  senate  and  two  by  the  speaker  of  the  assembly,  to  examine 
into  and  report  upon  all  matters  connected  with  or  in  any  way  appertaining  to  the 
system  of  revenue  and  taxation  in  this  state ;  and  to  further  report  such  constitu- 


8  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

tional  and  legislative  measures  as  may  be  deemed  necessary  to  the  revision  and 
reform  of  said  system  of  revenue  and  taxation. 

Resolved,  That  said  joint  committee  be  and  it  hereby  is  authorized  and  empowered 
to  do  any  and  all  things  necessary  to  make  a  full  and  complete  investigation  of  the  mat- 
ters and  things  hereinabove  enumerated,  and  to  that  end  to  employ  all  necessary  clerical 
and  expert  assistants,  and  that  said  joint  committee  be  and  is  hereby  authorized  and 
empowered  to  send  for  persons  and  papers,  and  to  take  all  necessary  means  to  procure 
the  attendance  of  witnesses  and  testimony ;  and  the  members  of  said  joint  com- 
mittee are,  and  each  of  them  is,  hereby  authorized  to  administer  oaths ;  and  that  all 
the  provisions  of  article  eight,  of  chapter  two,  title  one,  part  three,  of  the  Political 
Code  of  this  state,  relative  to  the  "attendance  and  examination  of  witnesses  before 
the  legislature  and  committees  thereof,"  shall  apply  to  the  joint  committee  appointed 
under  this  resolution,  and  that  the  sergeant-at-arms  of  either  the  senate  or  the 
assembly  is  hereby  authorized  and  directed  to  serve  any  and  all  subpoenas  and  orders 
or  other  process  that  may  be  issued  by  the  chairman  of  said  joint  committee,  when 
directed  to  do  so  by  the  said  chairman. 

Resolved,  That  in  the  event  provision  is  made  by  law  for  the  existence  of  a  com- 
mission for  the  revision  and  reform  of  the  system  of  revenue  and  taxation  in  force 
in  this  state,  of  which  the  aforementioned  committee  is  to  be  a  constituent  part,  then 
and  in  that  event,  the  joint  committee  aforesaid  and  the  members  thereof  are  author- 
ized to  act  as,  and  be  an  integral  part  and  portion  of,  said  commission. 

The  president  of  the  senate  appointed  as  members  of  the  commission 
from  the  senate,  Senators  J.  B.  Curtin  and  M.  L.  Ward,  and  the  speaker 
of  the  assembly  appointed  upon  the  commission  from  the  assembly, 
Assemblymen  H.  S.  G.  McCartney  and  E.  F.  Treadwell,  and  His  Excel- 
lency George  C.  Pardee,  then  governor,  appointed  Professor  Carl  C. 
Plehn,  as  expert  on  taxation  and  public  finance  as  provided  for  in  said 
act. 

Thereafter  the  commission  met  and  organized,  and  early  in  the  sum- 
mer of  1905,  began  its  work  of  gathering  data  with  a  view  of  reporting 
to  the  legislature  such  changes  in  the  laws  of  this  state  relative  to 
revenue  and  taxation  as  the  result  of  its  labors  might  suggest.  In 
August,  1906,  the  commission  published  a  preliminary  report  of  71 
pages,  which  was  submitted  to  the  members  of  the  legislature,  and  which 
served  the  double  purpose  of  announcing  the  plan  of  tax  reform  and 
of  securing  criticism.  In  December,  1906,  the  commission  completed 
its  labors  and  made  its  final  report  to  the  legislature.  This  report  was 
printed  at  the  State  Printing  Office,  and  comprises  296  pages.  The 
commission  was  then  of  a  unit  in  saying  that  the  present  system  of 
taxation  as  provided  for  in  the  constitution  of  the  State  of  California, 
does  not  equally  distribute  the  burden  of  taxation  and  that  the  burden 
can  not  equally  be  distributed  by  ad  valorem  taxation,  but  that  burden 
could  be  more  equally  distributed  by  separating  the  revenues  of  the 
state  and  county  so  that  the  state  would  get  its  revenue  from  public 
service  and  other  corporations  and  the  counties  their  revenue  from 
the  remaining  property.  To  that  end  it  proposed  a  constitutional 
amendment  for  the  consideration  of  the  legislature  at  its  session  in 
January,  1907,  and  the  amendment  thus  proposed  was  acted  upon  by 
the  legislature  and  amended  in  some  particulars,  which  did  not  affect 
the  structure  of  the  amendment  as  recommended  by  the  commission,  and 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  9 

the  same  was  submitted  for  consideration  to  the  voters  at  the  session  of 
the  legislature  in  January,  1907.  The  amendment  as  submitted  is  as 
follows : 

The  Amendment  Voted  on  in  1908. 

Senate  Constitutional  Amendment  No.  1. — A  resolution  to  propose  to  the  people  of 
the  State  of  California  an  amendment  to  the  constitution  of  the  State  of  Cali- 
fornia providing  for  the  separation  of  state  and  local  taxation,  providing  for  the 
taxatioti  of  public  service  and  other  corporations  for  the  ienefit  of  the  state,  and 
to  that  end  amending  sections  one,  nine,  ten  and  eleven  of  article  thirteen  and 
adding  to  article  thirteen  two  new  sections  to  he  numbered  sections  fourteen  and 
fifteen,  and  repealing  section  ten  of  article  eleven  thereof,  all  relating  to  revenue 
and  taxation. 

[Adopted  March  9,  1907.] 

Whereas,  It  is  deemed  desirable  to  ultimately  separate  the  sources  of  revenue  for 
state  purposes  from  the  sources  of  revenue  for  county  and  municipal  purposes ;  now, 
therefore, 

The  legislature  of  the  State  of  California,  at  its  regular  session,  commencing  the 
seventh  day  of  January,  nineteen  hundred  and  seven,  two  thirds  of  all  the  members 
elected  to  each  of  the  two  houses  of  said  legislature  voting  in  favor  thereof,  hereby 
proposes  to  the  qualified  electors  of  the  State  of  California  the  following  amendment 
to  the  constitution  of  the  State  of  California : 

First.  Sections  one,  nine,  ten  and  eleven  of  article  thirteen  are  hereby  amended 
so  as  to  read  : 

Section  1.  All  property  in  the  state  except  as  otherwise  in  this  constitution 
provided,  not  exempt  under  the  laws  of  the  United  States,  shall  be  taxed  in  propor- 
tion to  its  value,  to  be  ascertained  as  provided  by  law,  or  as  hereinafter  provided. 
The  word  "property,"  as  used  in  this  article  and  section,  is  hereby  declared  to  include 
moneys,  credits,  bonds,  stocks,  dues,  franchises,  and  all  other  matters  and  things, 
real,  personal  and  mixed,  capable  of  private  ownership ;  provided,  that  property 
used  for  free  public  libraries  and  free  museums,  growing  crops,  property  used  exclu- 
sively for  public  schools,  and  such  as  may  belong  to  the  United  States,  this  state, 
or  to  any  county  or  municipal  corporation  within  this  state  shall  be  exempt  from 
taxation.  The  legislature  may  provide,  except  in  the  case  of  credits  secured  by 
mortgage  or  trust  deed,  for  a  deduction  from  credits  of  debts  due  to  bona  fide  resi- 
dents of  this  state. 

Sec.  9.  A  state  board  of  equalization,  consisting  of  one  member  from  each  con- 
gressional district  in  this  state,  as  the  same  existed  in  the  year  eighteen  hundred  and 
seventy-nine,  shall  be  elected  by  the  qualified  electors  of  their  respective  districts,  at 
the  general  election  to  be  held  in  the  year  one  thousand  nine  hundred  and  ten,  and  at 
each  gubernatorial  election  thereafter,  whose  term  of  ofllce  shall  be  for  four  years. 
The  controller  of  state  shall  be  ex  officio  a  member  of  the  board.  Said  board  shall 
be  the  successor  of  the  present  state  board  of  equalization  whose  members  shall  con- 
tinue in  office  until  their  successors,  as  herein  provided  for,  shall  be  elected  and 
shall  qualify.  The  legislature  shall  have  power  to  redistrict  the  state  into  four  dis- 
tricts, as  nearly  equal  in  population  as  practical,  and  to  provide  for  the  election  of 
members  of  said  board  of  equalization.  It  shall  be  the  duty  of  said  board  to  assess 
and  levy  the  taxes  provided  for  in  section  fourteen  of  this  article  and  to  perform  such 
other  duties  in  relation  to  taxation  as  this  constitution  or  the  legislature  may  pre- 
scribe. The  boards  of  supervisors  of  the  several  counties  of  the  state  shall  constitute 
boards  of  equalization  for  their  respective  counties,  whose  duty  it  shall  be  to  equalize 
the  valuation  of  the  taxable  property  in  the  county  for  the  purposes  of  tiixation: 
Such  county  boards  of  equalization  are  hereby  authorized  and  empowered,  under  such 
rules  of  notice  as  they  may  prescribe,  to  raise  or  lower  any  assessment  contained  in 
the  assessment  roll  so  as  to  equalize  the  assessment  of  the  property  contained  in 
said  assessment  roll,  and  make  the  assessment  conform  to  the  true  value  in  money 
of  the  property  contained  in  said  roll.  But  no  board  of  equalization  shall  raise  any 
mortgage,  deed  of  trust,  contract  or  other  obligation  by  which  a  debt  is  secured, 
money,  or  solvent  credit,  above  its  face  value. 

Sec.  10.  All  property,  except  as  otherwise  in  this  constitution  provided,  shall  be 
assessed  in  the  county,  city,  city  and  county,  town,  township,  or  district  in  which  it 
is  situated,  in  the  manner  prescribed  by  law. 

Sec.  11.  Income  taxes  may  be  assessed  to  and  collected  from  persons,  corpora- 
tions, joint-stock  associations,  or  companies  resident  or  doing  business  in  this  state, 


10  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

except  those  provided  for  in  subdivisions  (a),  (6)  and  (c)  of  section  fourteen  of  this 
article,  or  any  one  or  more  of  them,  in  such  cases  and  amounts,  and  in  such  manner, 
as  shall  be  prescribed  by  law. 

Second.  There  is  hereby  added  to  article  thirteen  two  new  sections  to  be  numbered 
fourteen  and  fifteen  and  to  read  as  follows  : 

Sec.  14.  Taxes  levied,  assessed  and  collected  as  hereinafter  provided  upon  rail- 
roads, including  street  railways,  whether  operated  in  one  or  more  counties;  sleeping 
car,  dininj?  car,  drawing-room  car  and  palace  car  companies,  refrigerator,  oil,  stock, 
fruit,  and  other  car-loaning  and  other  car  companies  operating  upon  railroads  in  this 
state  ;  every  company  doing  express  business  on  any  railroad,  steamboat,  vessel  or 
stage  line  in  this  state ;  telegraph  companies,  telephone  companies ;  companies  engaged 
in  the  transmission  or  sale  of  gas  or  electricity ;  insurance  companies,  banks,  banking 
associations,  savings  and  loan  societies,  and  trust  companies;  and  taxes  upon  all 
franchises  of  every  kind  and  nature,  shall  be  entirely  and  exclusively  for  state  pur- 
poses, and  shall  be  levied,  assessed  and  collected  in  the  manner  hereinafter  provided. 
The  word  "companies"  as  used  in  this  section  shall  include  persons,  partnerships, 
joint-stock  associations,  companies,  and  corporations.  All  property,  not  exempt  from 
taxation,  except  those  classes  of  property  enumerated  in  this  section,  shall  be  subject 
to  assessment  and  taxation,  in  the  manner  provided  by  law,  for  county,  city  and 
county,  city,  town,  township,  and  district  purposes;  provided,  that  until  the  year 
1914  the  state  shall  reimburse  San  Bernardino,  Placer  and  Yuba  counties  for  the  net 
loss  in  county  revenues  occasioned  by  the  withdrawal  of  railroad  property  from 
county  taxation. 

(a)  All  railroad  companies,  including  street  railways,  whether  operated  in  one 
or  more  counties  ;  all  sleeping  car,  dining  car,  drawing-room  car,  and  palace  car  com- 
panies, all  refrigerator,  oil,  stock,  fruit  and  other  car-loaning  and  other  car  com- 
panies, operating  upon  the  railroads  of  this  state ;  all  companies  doing  express 
business  on  any  railroad,  steamboat,  vessel  or  stage  line  in  this  state;  all  telegraph 
and  telephone  companies ;  and  all  companies  engaged  in  the  transmission  or  sale  of 
gas  or  electricity  shall  annually  pay  to  the  state  a  tax  upon  their  franchises,  road- 
ways, roadbeds,  rails,  rolling  stock,  poles,  wires,  pipes,  canals,  conduits,  rights  of 
way,  and  other  property  used  in  the  operation  of  their  business  in  this  state,  computed 
as  follows :  Said  tax  shall  be  equal  to  the  percentages  hereinafter  fixed  upon  the  gross 
receipts  from  operation  of  such  companies  and  each  thereof  within  this  state.  When 
such  companies  are  operating  partly  within  and  partly  without  this  state,  the  gross 
receipts  within  this  state  shall  be  deemed  to  be  all  receipts  on  business  beginning  and 
ending  within  this  state,  and  a  proportion,  based  upon  the  proportion  of  the  mileage 
within  this  state  to  the  entire  mileage  over  which  such  business  is  done,  of  receipts 
on  all  business  passing  through,  into,  or  out  of  this  state.  Such  taxes  shall  be  in 
lieu  of  all  other  taxes  and  licenses,  state,  county,  and  municipal,  upon  the  property 
above  enumerated  of  such  companies ;  provided,  that  nothing  herein  shall  be  construed 
to  release  any  such  company  from  the  payment  of  any  amount  agreed  to  be  paid  or 
required  by  law  to  be  paid  for  any  special  privilege  or  franchise  granted  by  the 
municipal  authorities  of  this  state. 

The  percentages  above  mentioned  shall  be  as  follows:  On  all  railroad  companies, 
including  street  railways,  four  per  cent;  on  all  sleeping  car,  dining  car,  drawing- 
room  car,  palace  car  companies,  refrigerator,  oil,  stock,  fruit  and  other  car-loaning 
and  other  car  companies,  three  per  cent ;  on  all  companies  doing  express  business  on 
any  railroad,  steamboat,  vessel  or  stage  line,  two  per  cent ;  on  all  telegraph  and  tele- 
phone companies,  three  and  one  half  per  cent;  on  all  companies  engaged  in  the  trans- 
mission or  sale  of  gas  or  electricity,  four  per  cent. 

(6)  Every  insurance  company  or  association  doing  business  in  this  state  shall 
annually  pay  to  the  state  a  tax  of  one  and  one  half  per  cent  upon  the  amount  of  the 
gross  premiums  received  upon  its  business  done  in  this  state,  less  return  premiums 
and  reinsurance  in  companies  or  associations  authorized  to  do  business  in  this  state ; 
provided,  that  there  shall  be  deducted  from  said  one  and  one  half  per  cent  upon  the 
gross  premiums  the  amount  of  any  county  and  municipal  taxes  paid  by  such  com- 
panies on  real  estate  owned  by  them  in  this  state.  This  tax  shall  be  in  lieu  of  all 
other  taxes  and  licenses,  state,  county  and  municipal,  upon  the  property  of  such 
companies,  except  county  and  municipal  taxes  on  real  estate ;  provided,  that  when 
by  the  laws  of  any  other  state  or  country,  any  taxes,  fines,  penalties,  licenses,  fees, 
deposits  of  money,  or  of  securities,  or  other  obligations  or  prohibitions,  are  imposed 
on  insurance  companies  of  this  state,  doing  business  in  such  other  state  or  country, 
or  upon  their  agents  therein,  in  excess  of  such  taxes,  fines,  penalties,  licenses,  fees, 
deposits  of  securities,  or  other  obligations  or  prohibitions,  imposed  upon  insurance 
companies  of  such  other  state  or  country,  so  long  as  such  laws  continue  in  force,  the 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  11 

same  obligations  and  prohibitions  of  whatsoever  kind  may  be  imposed  by  the  legis- 
lature upon  insurance  companies  of  such  other  state  or  country  doing  business  in 
this  state. 

(c)  The  shares  of  the  capital  stock  of  all  banks,  organized  under  the  laws  of  this 
state,  or  of  the  United  States,  or  of  any  other  state  and  located  in  this  state,  shall 
be  assessed  and  taxed  to  the  owners  or  holders  thereof  by  the  state  board  of  equaliza- 
tion in  the  manner  to  be  prescribed  by  law,  in  the  city  or  town  where  the  bank  is 
located  and  not  elsewhere.  There  shall  be  levied  and  assessed  upon  such  shares  of 
capital  stock  an  annual  tax,  payable  to  the  state,  of  one  per  centum  upon  the  value 
thereof.  The  value  of  each  share  of  stock  in  each  bank,  except  such  as  are  in  liqui- 
dation, shall  be  taken  to  be  the  amount  paid  in  thereon,  together  with  its  pro  rata 
of  the  accumulated  surplus  and  undivided  profits.  The  value  of  each  share  of  stock 
in  each  bank  which  is  in  liquidation  shall  be  taken  to  be  its  pro  rata  of  the  actual 
assets  of  such  bank.  This  tax  shall  be  in  lieu  of  all  other  taxes  and  licenses,  state, 
county  and  municipal,  upon  such  shares  of  stock  and  upon  the  property  of  such  banks, 
except  taxes  on  real  estate.  In  determining  the  value  of  the  capital  stock  of  any 
bank  there  shall  be  deducted  from  the  value,  as  defined  above,  the  value,  as  assessed 
for  county  taxes,  of  any  real  estate  other  than  mortgage  interests  therein,  owned 
by  such  bank  and  taxed  for  county  purposes.  The  banks  shall  be  liable  to  the  state 
for  this  tax  and  the  same  shall  be  paid  to  the  state  by  them  on  behalf  of  the  stock- 
holders in  the  manner  and  at  the  time  prescribed  by  law,  and  they  shall  have  a  lien 
upon  the  shares  of  stock  and  upon  any  dividends  declared  thereon  to  secure  the 
amount  so  paid. 

The  moneyed  capital,  reserve,  surplus,  undivided  profits  and  all  other  property 
belonging  to  unincorporated  banks  or  bankers  of  this  state,  or  held  by  any  bank 
located  in  this  state  which  has  no  shares  of  capital  stock,  or  employed  in  this  state 
by  any  branches,  agencies  or  other  representatives  of  any  banks  doing  business  out- 
side of  the  State  of  California,  shall  be  likewise  assessed  and  taxed  to  such  banks 
or  bankers  by  the  said  board  of  equalization,  in  the  manner  to  be  provided  by  law,  and 
taxed  at  the  same  rate  that  is  levied  upon  the  shares  of  stock  of  incorporated  banks, 
as  provided  in  the  first  paragraph  of  this  subdivision.  The  value  of  said  property 
shall  be  determined  by  taking  the  entire  property  invested  in  such  business  together 
with  all  the  reserve,  surplus  and  undivided  profits,  including  the  good  will  of  the 
business,  at  their  full  cash  value,  and  deducting  therefrom  the  value  as  assessed  for 
county  taxes  of  any  real  estate  other  than  mortgage  interests  therein,  owned  by  such 
bank  and  taxed  for  county  purposes.  Such  taxes  shall  be  in  lieu  of  all  other  taxes 
and  licenses,  state,  county  and  municipal,  upon  the  property  of  the  banks  and  bankers 
mentioned  in  this  paragraph,  except  taxes  on  real  estate.  It  is  the  intention  of  this 
paragraph  that  all  moneyed  capital  and  property  of  the  banks  and  bankers  mentioned 
in  this  paragraph  shall  be  assessed  and  taxed  at  the  same  rate  as  an  incorporated 
bank,  provided  for  in  the  first  paragraph  of  this  subdivision.  In  determining  the 
value  of  the  moneyed  capital  and  property  of  the  banks  and  bankers  mentioned  in 
this  subdivision,  the  said  state  board  of  equalization  shall  include  and  assess  to  such 
banks  all  property  and  everything  of  value  owned  or  held  by  them,  which  would  go 
to  make  up  the  value  of  the  capital  stock  of  such  banks  and  bankers,  if  the  same  were 
incorporated  and  had  shares  of  capital  stock. 

The  word  "banks"  as  used  in  this  subdivision  shall  include  banking  associations, 
savings  and  loan  societies  and  trust  companies. 

(d)  Every  corporation  incorporated  under  the  laws  of  this  state,  excepting  the 
corporations  mentioned  in  the  preceding  subdivisions  of  this  section,  and  excepting  all 
educational,  religious  and  charitable  corporations  and  all  corporations  which  are  not 
organized  for  pecuniary  profit,  shall  pay  an  annual  tax  to  the  state  upon  its  franchise 
to  be  a  corporation,  and  every  corporation  incorporated  elsewhere  and  doing  business 
in  this  state,  other  than  the  corporations  mentioned  in  the  preceding  subdivisions  of 
this  section,  shall  pay  an  annual  tax  to  the  state  upon  its  right  to  do  business  in  this 
state,  as  follows :  when  the  authorized  capital  stock  of  the  corporation  does  not 
exceed  ten  thousand  dollars  ($10,000)  the  tax  shall  be  ten  dollars  ($10.00)  ;  when 
the  authorized  capital  stock  exceeds  ten  thousand  dollars  ($10,000)  but  does  not 
exceed  twenty  thousand  dollars  ($20,000)  the  tax  shall  be  fifteen  dollars  ($15.00)  ; 
when  the  authorized  capital  stock  exceeds  twenty  thousand  dollars  ($20,000)  but  does 
not  exceed  fifty  thousand  dollars  ($50,000)  the  tax  shall  be  twenty  dollars  ($20.00)  ; 
when  the  authorized  capital  stock  exceeds  fifty  thousand  dollars  ($50,000)  but  does 
not  exceed  one  hundred  thousand  dollars  ($100,000)  the  tax  shall  be  twenty-five 
dollars  ($25.00)  ;  when  the  authorized  capital  stock  exceeds  one  hundred  thousand 
dollars  ($100,000)  but  does  not  exceed  two  hundred  and  fifty  thousand  dollars 
($250,000)  the  tax  shall  be  fifty  dollars  ($50.00)  ;  when  the  authorized  capital  stock 


12  REPORT  OP  COMMISSION  ON  REVENUE  AND  TAXATION. 

exceeds  two  hundred  and  fifty  thousand  dollars  ($250,000)  but  does  not  exceed  five 
hundred  thousand  dollars  ($500,000)  the  tax  shall  be  seventy-five  dollars  ($75.00)  ; 
when  the  authorized' capital  stock  exceeds  five  hundred  thousand  dollars  ($500.0(X)) 
but  does  not  exceed  two  million  dollars  ($2,(X)0,000)  the  tax  shall  be  one  hundred 
dollars  ($100.00)  ;  when  the  authorized  capital  stock  exceeds  two  million  dollars 
($2,000,000)  but  does  not  exceed  five  million  dollars  ($5,000,000)  the  tax  shall  be 
two  hundred  dollars  ($200.00)  ;  when  the  authorized  capital  stock  exceeds  five  million 
dollars  ($5,000,000)  the  tax  shall  be  two  hundred  and  fifty  dollars  ($250.00). 

(e)  All  franchises  other  than  those  expressly  provided  for  in  this  section,  shall  be 
assessed  by  the  state  board  of  equalization  at  their  actual  value,  and  shall  be  taxed' 
at  the  rate  of  one  per  centum  thereon  each  year,  and  the  taxes  collected  thereon  shall 
be  exclusively  for  the  benefit  of  the  state. 

if)  All  the  provisions  of  this  section  shall  be  self-executing,  but  the  legislature 
may  pass  all  laws  necessary  to  carry  this  section  into  effect.  The  taxes  herein  pro- 
vided for  shall  be  levied  and  assessed  on  the  first  Monday  in  March  of  each  j'ear  after 
the  adoption  of  this  amendment  and  shall  become  due  and  payable  on  the  first  Monday 
in  June  thereafter.  The  gross  earnings  and  gross  premiums  herein  mentioned  shall 
be  computed  for  the  year  ending  the  thirt3''-first  day  of  December  prior  to  the  levy 
of  such  taxes  and  the  value  of  any  property  mentioned  herein  shall  be  fixed  as  of  the 
date  of  said  levy.  Nothing  herein  contained  shall  affect  any  tax  levied  or  assessed 
prior  to  the  adoption  of  this  section  and  all  laws  in  relation  to  such  taxes  in  force  at 
the  time  of  the  adoption  of  this  section  shall  remain  in  force  until  changed  by  the 
legislature. 

Sec.  15.  No  suit,  action,  or  proceeding  shall  ever  be  maintained  in  any  court 
against  this  state,  or  against  any  ofiicer  thereof,  to  have  any  tax,  levied  under  the 
provisions  of  this  article,  declared  invalid  or  to  prevent  or  enjoin  the  collection  thereof 
until  such  tax  has  been  actually  paid ;  but  after  such  payment,  action  may  be  main- 
tained to  recover  any  tax  illegally  collected  in  such  manner  and  within  such  time  as 
may  now  or  hereafter  be  provided  by  law. 

Third.     Section  ten  of  article  eleven  of  said  constitution  is  hereby  repealed. 

Upon  this  amendment  there  were  cast  202,081  votes,  of  which  87,977 
were  in  favor  of  the  adoption  and  114,104  against  it.  Although  the 
subject  is  an  intricate  one  and  one  which  the  ordinary  voter  does  not 
readily  understand,  yet  the  defects  in  the  present  existing  system  were 
so  apparent  and  injustice  so  often  done  to  the  taxpayer  that  there  has 
been  a  general  demand  for  the  revision  of  the  revenue  laws  of  this  state. 
This  amendment  occupied  the  public  attention  to  a  considerable  extent 
shortly  prior  to  the  election  in  November,  1908,  and  three  defects  were 
pointed  out  and  were  the  controlling  factors  in  the  defeat  of  the  amend- 
ment.   Those  defects  were: 

First — ^Under  the  amendment,  if  the  revenues  of  the  state  to  be 
derived  from  the  operation  of  the  new  system  were  insufficient,  there 
would  be  no  way  of  meeting  the  deficit  without  again  amending  the 
constitution,  and  therefore  the  amendment  was  deemed  too  inflexible. 

Second — Its  provisions  were  held  not  to  be  clear  as  to  whether  or  not 
public  service  corporations  were  exempt  from  paying  their  share  of 
past  bonded  indebtedness,  and  as  many  counties  in  the  state  had  incurred 
a  bonded  indebtedness  and  did  so  upon  the  faith  that  all  the  property 
then  in  the  counties  and  cities,  respectively,  would  be  subject  to  taxation 
for  its  fair  share  of  that  indebtedness,  to  relieve  those  public  service 
corporations  of  that  indebtedness  would,  it  was  thought,  shift  too  great 
a  burden  upon  the  remaining  property. 

Third — That  if  a  deficiency  ad  valorem  tax  should  ever  be  necessary 


REPORT  OP  COMMISSION  ON  REVENUE  AND  TAXATION.  13 

the  corporations  taxed  for  state  purposes  would  not  be  required  to  pay- 
any  portion  of  this  deficiency  but  it  would  fall  on  the  remaining  prop- 
erty taxed  for  county  purposes  and  this  was  deemed  unfair  and  regarded 
as  an  objection  to  the  amendment. 

Fourth — That  no  provision  was  made  in  that  amendment  for  chang- 
ing any  of  the  rates  should  it  be  found  that  the  rates  were  inadequate  or 
in  any  manner  unfair,  and  for  that  reason  the  amendment  was  too 
inflexible. 

Other  minor  defects  were  suggested,  but  they  were  not  of  controlling 
importance  and  the  commission  believed  they  had  but  little  influence 
in  molding  public  sentiment  as  to  the  merits  or  demerits  of  this  amend- 
ment and  were  unanimous  in  the  opinion  that  the  matter  should  be 
again  submitted  to  the  legislature,  and  therefore  proposed  another 
amendment  which  obviated  all  the  objections  that  were  raised  to  the 
former  amendment.  This  amendment  was  very  carefully  considered 
by  the  legislature  and  was  adopted  and  is  known  as  Senate  Constitu- 
tional Amendment  No.  1,  and  is  as  follows: 

The  Amendment  to  be  Voted  on  in  November,  1910. 

Senate  Constitutional  Amendment  No.  1. — A  resolution  to  propose  to  the  people  of 
the  State  of  California  an  amendment  to  the  constitution  of  the  State  of  California 
providing  for  the  separation  of  state  and  local  taxation,  providing  for  the  taxation 
of  puhlio  service  and  other  corporations  for  the  henefit  of  the  state,  and  to  that 
end  adding  to  article  thirteen  a  new  section  to  he  numbered  section  fourteen,, 
amending  section  ten  of  article  thirteen,  and  repealing  section  ten  of  article  eleven 
thereof,  all  relating  to  revenue  and  taxation. 

[Adopted  March  19,  1909.] 

Whereas,  It  is  deemed  desirable  to  separate  the  sources  of  revenue  for  state  pur- 
poses from  the  sources  of  revenue  for  county  and  municipal  purposes ;  now,  therefore, 

The  legislature  of  the  State  of  California,  at  its  regular  session,  commencing  on  the 
fourth  day  of  January,  nineteen  hundred  and  nine,  tv^^o  thirds  of  all  the  members 
elected  to  each  of  the  two  houses  of  said  legislature  voting  in  favor  thereof,  hereby 
proposes  to  the  qualified  electors  of  the  State  of  California  the  following  amendment 
to  the  constitution  of  the  State  of  California : 

First.  There  is  hereby  added  to  article  thirteen  a  new  section  to  be  numbered 
fourteen  and  to  read  as  follows : 

Section  14.  Taxes  levied,  assessed  and  collected  as  hereinafter  provided  upon  rail- 
roads, including  street  railways,  whether  operated  in  one  or  more  counties ;  sleeping 
C£W,  dining  car,  drawing-room  car  and  palace  car  companies,  refrigerator,  oil,  stock, 
fruit,  and  other  car  loaning  and  other  car  companies  operating  upon  railroads  in  this 
state ;  companies  doing  express  business  on  any  railroad,  steamboat,  vessel  or  stage 
line  in  this  state  ;  telegraph  companies ;  telephone  companies ;  companies  engaged  in 
the  transmission  or  sale  of  gas  or  electricity ;  insurance  companies  ;  banks,  banking 
associations,  savings  and  loan  societies,  and  trust  companies ;  and  taxes  upon  all 
franchises  of  every  kind  and  nature,  shall  be  entirely  and  exclusively  for  state  pur- 
poses, and  shall  be  levied,  assessed  and  collected  in  the  manner  hereinafter  provided. 
The  word  "companies"  as  used  in  this  section  shall  include  persons,  partnerships, 
joint-stock  associations,  companies,  and  corporations. 

(a)  All  railroad  companies,  including  street  railways,  whether  operated  in  one  or 
more  counties ;  all  sleeping  car,  dining  car,  drawing-room  car,  and  palace  car  com- 
panies, all  refrigerator,  oil,  stock,  fruit,  and  other  car-loaning  and  other  car  com- 
panies, operating  upon  the  railroads  in  this  state ;  all  companies  doing  express  busi- 
ness on  any  railroad,  steamboat,  vessel  or  stage  line  in  this  state ;  all  telegraph  and 
telephone  companies ;  and  all  companies  engaged  in  the  transmission  or  sale  of  gas  or 
electricity  shall  annually  pay  to  the  state  a  tax  upon  their  franchises,  roadways. 


14  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

roadbeds,  rails,  rolling  stock,  poles,  wires,  pipes,  canals,  conduits,  rights  of  way,  and 
other  property,  or  any  part  thereof,  used  exclusively  in  the  operation  of  their  busi- 
ness in  this  state,  computed  as  follows:  Said  tax  shall  be  equal  to  the  percentages 
hereinafter  fixed  upon  the  gross  receipts  from  operation  of  such  companies  and  each 
thereof  within  this  state.  When  such  companies  are  operating  partly  within  and 
partly  without  this  state,  the  gross  receipts  within  this  state  shall  be  deemed  to  be 
all  receipts  on  business  beginning  and  ending  within  this  state,  and  a  proportion,  based 
upon  the  proportion  of  the  mileage  within  this  state  to  the  entire  mileage  over  which 
such  business  is  done,  of  receipts  on  all  business  passing  through,  into,  or  out  of  this 
state. 

The  percentages  above  mentioned  shall  be  as  follows:  On  all  railroad  companies, 
including  street  railways,  four  per  cent;  on  all  sleeping  car,  dining  car,  drawing- 
room  car,  palace  car  companies,  refrigerator,  oil,  stock,  fruit  and  other  car-loaning 
and  other  car  companies,  three  per  cent;  on  all  companies  doing  express  business  on 
any  railroad,  steamboat,  vessel  or  stage  line,  two  per  cent ;  on  all  telegraph  and  tele- 
phone companies,  three  and  one  half  per  cent ;  on  all  companies  engaged  in  the  trans- 
mission or  sale  of  gas  or  electricity,  four  per  cent.  Such  taxes  shall  be  in  lieu  of  all 
other  taxes  and  licenses,  state,  county  and  municipal,  upon  the  property  above 
enumerated  of  such  companies  except  as  otherwise  in  this  section  providec^ ;  provided, 
that  nothing  herein  shall  be  construed  to  release  any  such  company  from  the  payment 
of  any  amount  agreed  to  be  paid  or  required  by  law  to  be  paid  for  any  special  privilege 
or  franchise  granted  by  any  of  the  municipal  authorities  of  this  state.      ' 

(ft)  Every  insurance  company  or  association  doing  business  in  this  state  shall 
annually  pay  to  the  state  a  tax  of  one  and  one  half  per  cent  upon  the  amount  of  the 
gross  premiums  received  upon  its  business  done  in  this  state,  less  return  premiums 
and  reinsurance  in  companies  or  associations  authorized  to  do  business  in  this  state ; 
provided,  that  there  shall  be  deducted  from  said  one  and  one  half  per  cent  upon  the 
gross  premiums  the  amount  of  any  county  and  municipal  taxes  paid  by  such  com- 
panies on  real  estate  owned  by  them  in  this  state.  This  tax  shall  be  in  lieu  of  all 
other  taxes  and  licenses,  state,  county  and  municipal,  upon  the  property  of  such  com- 
panies, except  county  and  municipal  taxes  on  real  estate,  and  except  as  otherwise  in 
this  section  provided ;  provided,  that  when  by  the  laws  of  any  other  state  or  country, 
any  taxes,  fines,  penalties,  licenses,  fees,  deposits  of  money,  or  of  securities,  or  other 
obligations  or  prohibitions,  are  imposed  on  insurance  companies  of  this  state,  doing 
business  in  such  other  state  or  country,  or  upon  their  agents  therein,  in  excess  of  such 
taxes,  fines,  penalties,  licenses,  fees,  deposits  of  money,  or  of  securities,  or  other 
obligations  or  prohibitions,  imposed  upon  insurance  companies  of  such  other  state  or 
country,  so  long  as  such  laws  continue  in  force,  the  same  obligations  and  prohibitions 
of  whatsoever  kind  may  be  imposed  by  the  legislature  upon  insurance  companies  of 
such  other  state  or  country  doing  business  in  this  state. 

(c)  The  shares  of  capital  stock  of  all  banks,  organized  under  the  laws  of  this 
state,  or  of  the  United  States,  or  of  any  other  state  and  located  in  this  state,  shall 
be  assessed  and  taxed  to  the  owners  or  holders  thereof  by  the  state  board  of  equaliza- 
tion in  the  manner  to  be  prescribed  by  law,  in  the  city  or  town  where  the  bank  is 
located  and  not  elsewhere.  There  shall  be  levied  and  assessed  upon  such  shares  of 
capital  stock  an  annual  tax,  payable  to  the  state,  of  six  tenths  of  one  per  centum 
upon  the  value  thereof.  The  value  of  each  share  of  stock  in  each  bank,  except  such 
as  are  in  liquidation,  shall  be  taken  to  be  the  amount  paid  in  thereon,  together  with 
its  pro  rata  of  the  accumulated  surplus  and  undivided  profits.  The  value  of  each 
share  of  stock  in  each  bank  which  is  in  liquidation  shall  be  taken  to  be  its  pro  rata 
of  the  actual  assets  of  such  bank.  This  tax  shall  be  in  lieu  of  all  other  taxes  ^nd 
licenses,  state,  county  and  municipal,  upon  such  shares  of  stock  and  upon  the  prop- 
erty of  such  banks,  except  county  and  municipal  taxes  on  real  estate  and  except  as 
otherwise  in  this  section  provided.  In  determining  the  value  of  the  capital  stock  of 
any  bank  there  shall  be  deducted  from  the  value,  as  defined  above,  the  value,  as 
assessed  for  county  taxes,  of  any  real  estate  other  than  mortgage  interests  therein, 
owned  by  such  bank  and  taxed  for  county  purposes.  The  banks  shall  be  liable  to 
the  state  for  this  tax  and  the  same  shall  be  paid  to  the  state  by  them  on  behalf  of 
the  stockholders  in  the  manner  and  at  the  time  prescribed  by  law,  and  they  shall 
have  a  lien  upon  the  shares  of  stock  and  upon  any  dividends  declared  thereon  to 
secure  the  amount  so  paid. 

The  moneyed  capital,  reserve,  surplus,  undivided  profits  and  all  other  property 
belonging  to  unincorporated  banks  or  bankers  of  this  state,  or  held  by  any  bank 
located  in  this  state  which  has  no  shares  of  capital  stock,  or  employed  in  this  state 
by  any  branches,  agencies,  or  other  representatives  of  any  banks  doing  business  outside 
of  the  State  of  California,  shall  be  likewise  assessed  and  taxed  to  such  banks  or 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  15 

bankers  by  the  said  board  of  equalization,  in  the  manner  to  be  provided  by  law,  and 
taxed  at  the  same  rate  that  is  levied  upon  the  shares  of  capital  stock  of  incorporated 
banks,  as  provided  in  the  first  paragraph  of  this  subdivision.  The  value  of  said 
property  shall  be  determined  by  ..taking  the  entire  property  invested  in  such  business 
together  with  all  the  reserve,  surplus,  and  undivided  profits,  at  their  full  cash  value, 
and  deducting  therefrom  the  value  as  assessed  for  county  taxes  of  any  real  estate 
other  than  mortgage  interests  therein,  owned  by  such  bank  and  taxed  for  county 
purposes.  Such  taxes  shall  be  in  lieu  of  all  other  taxes  and  licenses,  state,  county 
and  municipal,  upon  the  property  of  the  banks  and  bankers  mentioned  in  this  para- 
graph, except  county  and  municipal  taxes  on  real  estate  and  except  as  otherwise  in 
this  section  provided.  It  is  the  intention  of  this  paragraph  that  all  moneyed  capital 
and  property  of  the  banks  and  bankers  mentioned  in  this  paragraph  shall  be  assessed 
and  taxed  at  the  same  rate  as  an  incorporated  bank,  provided  for  in  the  first  para- 
graph of  this  subdivision.  In  determining  the  value  of  the  moneyed  capital  and 
property  of  the  banks  and  bankers  mentioned  in  this  subdivision,  the  said  state  board 
of  equalization  shall  include  and  assess  to  such  banks  all  property  and  everything  of 
value  owned  or  held  by  them,  which  go  to  make  up  the  value  of  the  capital  stock  of 
such  banks  and  bankers,  if  the  same  were  incorporated  and  had  shares  of  capital 
stock. 

The  word  "banks"  as  used  in  this  subdivision  shall  include  banking  associations, 
savings  and  loan  societies  and  trust  companies,  but  shall  not  include  building  and 
loan  associations. 

(d)  All  franchises,  other  than  those  expressly  provided  for  in  this  section,  shall 
be  assessed  at  their  actual  cash  value,  in  the  manner  to  be  provided  by  law,  and  shall 
be  taxed  at  the  rate  of  one  per  centum  each  year,  and  the  taxes  collected  thereon  shall 
be  exclusively  for  the  benefit  of  the  state. 

(e)  Out  of  the  revenues  from  the  taxes  provided  for  in  this  section,  together  with 
all  other  state  revenues,  there  shall  be  first  set  apart  the  moneys  to  be  applied  by  the 
state  to  the  support  of  the  public  school  system  and  the  state  university.  In  the 
event  that  the  above  named  revenues  are  at  any  time  deemed  insufficient  to  meet  the 
annual  expenditures  of  the  state  including  the  above  named  expenditures  for  educa- 
tional purposes,  there  may  be  levied,  in  the  manner  to  be  provided  by  law,  a  tax,  for 
state  purposes,  on  all  the  property  in  the  state  including  the  classes  of  property 
enumerated  in  this  section,  suflScient  to  meet  the  deficiency.  All  property  enumerated 
in  subdivisions  a,  5,  and  d  of  this  section  shall  be  subject  to  taxation,  in  the  manner 
provided  by  law,  to  pay  the  principal  and  interest  of  any  bonded  indebtedness  created 
and  outstanding  by  any  city,  city  and  county,  county,  town,  township  or  district, 
before  the  adoption  of  this  section,  the  taxes  so  paid  for  principal  and  interest  on 
such  bonded  indebtedness  shall  be  deducted  from  the  total  amount  paid  in  taxes  for 
state  purposes, 

if)  All  the  provisions  of  this  section  shall  be  self-executing,  and  the  legislature 
shall  pass  all  laws  necessary  to  carry  this  section  into  effect,  and  shall  provide  for  a 
valuation  and  assessment  of  the  property  enumerated  in  this  section,  and  shall  pre- 
scribe  the  duties  of  the  state  board  of  equalization  and  any  other  officers  in  con- 
nection with  the  administration  thereof.  The  rates  of  taxation  fixed  in  this  section 
shall  remain  in  force  until  changed  by  the  legislature,  three  fourths  of  all  the  mem- 
bers elected  to  each  of  the  two  houses  voting  in  favor  thereof.  The  taxes  herein  pro- 
vided for  shall  become  a  lien  on  the  first  Monday  in  March  of  each  year  after  the 
adoption  of  this  section  and  shall  become  due  and  payable  on  the  first  Monday  in 
July  thereafter.  The  gross  receipts  and  gross  premiums  herein  mentioned  shall  be 
computed  for  the  thirty-first  day  of  December  prior  to  the  levy  of  such  taxes  and  the 
value  of  any  property  mentioned  herein  shall  be  fixed  as  of  the  first  Monday  in  March. 
Nothing  herein  contained  shall  affect  any  tax  levied  or  assessed  prior  to  the  adoption 
of  this  section  and  all  laws  in  relation  to  such  taxes  in  force  at  the  time  of  the 
adoption  of  this  section  shall  remain  in  force  until  changed  by  the  legislature.  Until 
the  year  1918  the  state  shall  reimburse  San  Bernardino  and  Placer  counties  for  the 
net  loss  in  county  revenue  occasioned  by  the  withdrawal  of  railroad  property  from 
county  taxation.  The  legislature  shall  provide  for  reimbursement  from  the  general 
funds  of  any  county  to  districts  therein  where  loss  is  occasioned  in  such  districts  by 
the  withdrawal  from  local  taxation  of  property  taxed  for  state  purposes  only. 

(flr)  No  injunction  shall  ever  issue  in  any  suit,  action  or  proceeding  in  any  court 
against  this  state  or  against  any  officer  thereof  to  prevent  or  enjoin  the  collection  of 
any  tax  levied  under  the  provisions  of  this  section  until  such  tax  has  been  actually 
paid ;  but  after  such  payment  action  may  be  maintained  to  recover  any  tax  illegally 
collected  in  such  manner,  and  at  such  time  as  may  now  or  hereafter  be  provided 
by  law. 


16  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

Second.  Section  ten  of  article  thirteen  of  said  constitution  is  hereby  amended  to 
read  as  follows: 

Section  10.  All  property,  except  as  otherwise  in  this  constitution  provided,  shall  be 
assessed  in  the  county,  city,  city  and  county,  town  or  township,  or  district  in  which  it 
is  situated,  in  the  manner  prescribed  by  law. 

Third.     Section  ten  of  article  eleven  of  said  constitution  is  hereby  repealed. 

The  reorganization  of  the  commission. 

The  governor  of  this  state,  who  is  chairman  of  the  commission,  believed 
it  advisable  that,  as  the  main  work  of  the  commission  had  been  com- 
pleted, and  as  it  was  only  necessary  to  show  the  effect  of  the  proposed 
amendment  in  its  operation,  the  commission  should  be  reduced  in 
number,  and  therefore  recommended  that  the  act  creating  the  commis- 
sion be  amended  by  providing  for  the  appointment  of  only  one  com- 
missioner. The  legislature,  therefore,  amended  that  act  by  an  act 
approved  March  25,  1909,  as  follows : 

An  act  to  provide  for  the  appointment  of  a  commission  to  carry  out  the  work  men- 
tioned and  provided  for  in  an  act  entitled  ''An  act  authorizing  the  governor  to 
appoint  an  expert  in  taxation  and  public  finance,  to  sit  as  a  member  of  a  com- 
mission to  be  composed  of  himself  and  a  general  committee  of  the  senate  and 
assembly  of  the  thirty-sixth  session  of  the  legislature  of  the  State  of  California,  of 
which  commission  the  governor  shall  be  ex  officio  a  member  and  chairman,  to 
investigate  the  system  of  revenue  and  taxation  in  force  in  this  state  and  to  recom- 
mend a  plan  for  the  revision  and  reform  thereof;  to  provide  for  the  creation  of 
said  commission  and  to  define  its  powers  and  making  an  appropriation  therefor,^* 
approved  March  20,  1905,  and  making  an  appropriation  therefor. 

[Approved  March  25,  1909.] 

The  people  of  the  State  of  California,  represented  in  senate  and  assembly,  do  enact 

as  follovjs: 

Section  1.  The  governor  of  this  state  is  hereby  authorized  and  empowered  to 
appoint  one  person  versed  in  matters  relating  to  taxation,  and  a  secretary,  who  shall 
be  an  expert  on  the  science  of  finance  and  taxation,  to  carry  on  the  work  provided 
for  in  an  act  of  the  legislature  of  the  State  of  California  entitled  "An  act  authorizing 
the  governor  to  appoint  an  expert  in  taxation  and  public  finance,  to  sit  as  a  member 
of  a  commission  to  be  composed  of  himself  and  a  general  committee  of  the  senate  and 
assembly  of  the  thirty-sixth  session  of  the  legislature  of  the  State  of  California,  of 
which  commission  the  governor  shall  be  ex  ofiicio  a  member  and  chairman,  to  investi- 
gate the  system  of  revenue  and  taxation  in  force  in  this  state,  and  to  recommend  a 
I)lan  for  the  revision  and  reform  thereof ;  to  provide  for  the  creation  of  said  com- 
mission and  to  define  its  powers  and  making  an  appropriation  therefor,"  approved 
March  20,  1905,  and  the  persons  so  appointed  shall  carry  on  the  work  mentioned  in 
this  section  and  shall  constitute  said  commission  and  the  governor  shall  be  ex  ofiicio 
chairman  thereof. 

Sec.  2.  The  sum  of  five  thousand  dollars  or  so  much  thereof  as  may  be  necessary 
is  hereby  appropriated  out  of  any  moneys  in  the  state  treasury  not  otherwise  appro- 
priated for  the  purpose  of  carrying  on  the  work  mentioned  and  provided  for  in  this 
act ;  said  money  shall  be  exi)ended  and  used  for  the  purpose  of  paying  the  necessary 
expenses  of  the  members  of  said  commission  while  engaged  in  the  performance  of 
their  duties,  and  for  the  salary  of  the  expert  herein  mentioned,  and  for  all  necessary 
clerical,  printing  and  other  expenses  connected  with  the  work  of  carrying  out  the 
provisions  of  this  act.  The  claims  for  each  shall  be  audited  and  approved  by  the 
board  of  examiners,  in  the  manner  provided  by  law,  and  when  so  approved,  the  state 
controller  is  authorized  to  draw  his  warrant  therefor,  and  the  treasurer  is  directed 
to  pay  the  same. 

Sec.  3.    This  act  shall  take  effect  immediately. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  17 

In  pursuance  of  the  above  act  the  governor  on  June  8, 1910,  appointed 
Senator  J.  B.  Curtin,  commissioner,  and,  subsequently,  appointed 
Professor  Carl  C.  Plehn,  secretary,  to  carry  out  the  work  provided  for 
in  the  last  mentioned  act  of  the  legislature. 

The  commission  thereupon  set  to  work  and  has  carried  on  the  work 
ever  since  in  the  compilation  of  the  data  to  illustrate  how,  if  the  amend- 
ment had  been  in  force  during  the  year  1909,  it  would  have  affected  the 
revenue  of  each  county  in  this  state,  and  to  ascertain  whether  the  state 
would  obtain  revenue  sufficient  for  its  maintenance  if  the  amendment 
had  been  in  force  during  the  year  1909. 


2— RT 


18  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


SECTION!. 

ANALYSIS  Of  THE  PROVISIONS  Of  THE  AMENDMENT. 

As  the  preamble  states,  the  amendment  opens  the  way  for  a  separation 
of  state  from  local  taxation.  To  this  end  it  adds  a  new  section  to  article 
XIII  of  the  constitution,  which  article  is  the  one  dealing  with  revenue 
and  taxation.  It  leaves  the  old  sections  unchanged,  except  in  so  far  as 
they  are  modified  by  the  provisions  of  the  •new  section.  Section  10  of 
article  XI,  a  section  in  the  article  relating  to  counties,  cities  and  towns, 
is  repealed  because  it  prohibits  separation. 

The  amendment  provides  that  certain  taxes  on  the  property  of  certain 
classes  of  companies,  as  named  and  described  below,  shall  be  exclusively 
for  state  purposes.  It  leaves  the  old  system  of  ad  valorem  taxation  on 
property  in  general,  other  than  that  of  the  classes  named,  for  the  use  of 
the  counties,  cities,  school  and  other  districts.  The  term  ''companies'* 
is  defined  to  include  persons,  partnerships,  joint-stock  associations, 
companies  and  corporations. 

The  taxes  reserved  for  the  state  are : 

(1)  On  the  operative  property  of  railroad  companies,  including  street 
railways,  at  the  rate  of  four  per  cent  of  their  gross  receipts  annually. 

(2)  On  the  property  of  sleeping  car,  refrigerator  car,  and  all  other 
car  companies,  at  the  rate  of  three  per  cent  of  their  gross  profits 
annually. 

(3)  On  the  property  of  express  companies  at  the  rate  of  two  per  cent 
of  their  gross  receipts  annually. 

(4)  On  the  property  of  telegraph  and  telephone  companies  at  the 
rate  of  three  and  one  half  per  cent  of  their  gross  receipts  annually. 

(5)  On  the  operative  property  of  all  light,  heat  and  power  companies 
at  the  rate  of  four  per  cent  of  their  gross  receipts  annually. 

All  the  non-operative  property  of  the  above  corporations  is  left  sub- 
ject to  local  taxation. 

Street  car  companies  must  pay,  as  now,  the  two  per  cent  of  their  gross 
receipts  to  the  cities  under  the  Broughton  act  for  the  enjoyment  of 
their  franchises  in  the  public  streets,  and  this  is  in  addition  to  the  four 
per  cent  paid  to  the  state. 

(6)  Insurance  companies  are  to  pay  one  and  one  half  per  cent  of 
their  gross  premiums.  The  real  estate  of  insurance  companies  is  to  be 
taxed  locally  as  now. 

(7)  Banks  are  to  pay  six  tenths  of  one  per  cent  on  their  capital  stock, 
surplus  and  undivided  profits,  but  there  is  to  be  deducted  from  the 


REPORT  OP  COMMISSION  ON  REVENUE  AND  TAXATION.  19 

capital  stock  the  assessed  value  of  their  real  estate,  which  will  be  taxed 
locally  as  now. 

(8)  All  franchises  other  than  those  included  in  the  property  taxed 
as  above  are  to  be  valued  and  taxed  at  the  rate  of  one  per  cent  ad 
valorem. 

The  rates  of  taxation  set  down  in  the  amendment  can  be  changed  only 
by  a  three  fourths  vote  of  the  legislature. 

The  gross  receipts  upon  which  the  taxes  are  to  be  computed  are 
defined  in  accordance  with  the  law  that  has  been  in  force  in  Minnesota 
for  over  half  a  century  and  which  is  supported  by  numerous  decisions 
of  the  supreme  court  of  the  United  States  and  of  the  state  courts. 

The  state  board  of  equalization  is  made  the  board  of  assessment  for 
banks.  But  it  is  left  to  the  legislature  to  determine  who  shall  administer 
the  other  taxes. 

The  amendment  makes  it  obligatory  on  the  legislature  to  continue  the 
present  contributions  from  the  state  funds  for  the  common  schools  and 
other  educational  purposes.  It  provides  that  the  property  of  the  classes 
mentioned  shall  be  subject  as  heretofore  to  taxation  to  meet  the  interest 
and  principal  of  outstanding  bonded  indebtedness  of  the  cities,  counties^ 
school  districts,  etc.,  where  such  property  is  located. 

It  provides  further  that  in  case  the  state  revenues  from  the  taxes 
named  are  not  sufficient  to  meet  the  state's  needs  there  may  be  a  state 
ad  valorem  tax  on  all  property  including  property  of  the  classes  named. 

To  tide  over  the  period  of  change  and  readjustment,  two  counties,  San 
Bernardino  and  Placer,  are,  until  the  year  1918,  to  be  reimbursed  by  the 
state  for  what  they  lose  in  railroad  taxes,  and  any  districts  which  may 
suffer  by  the  sudden  change  are  to  be  aided  from  the  county  general 
funds. 

The  legislature  is  required  to  pass  the  laws  necessary  to  carry  thfe 
new  system  into  effect. 

In  explanation  of  the  above  rates  it  may  be  stated  that  they  are  fixed 
on  the  theory  that  these  proportions  of  the  gross  receipts  will  in  each 
case  equal  the  average  burden  of  taxation  on  other  classes  of  property. 
The  method  of  arriving  at  the  different  rates  is  explained  in  detail  in 
the  1906  report  of  this  commission. 


20  REPORT  OF  COMMISSION  ON  REVENUE  AND  TiVXATION. 


'^^  ■^''  SECTION  II. 

THE  flNDINGS. 

The  method  of  collecting  the  data. 

Beginning  in  June,  1909,  the  commission  entered  into  correspondence 
with  every  one  of  the  assessors  in  the  state  with  a  view  to  obtaining 
from  the  assessment  rolls  the  data  necessary  for  determining  how  the 
new  plan  of  taxation  would  work.  Owing,  however,  to  the  fact  that 
many  of  the  assessors  did  not  have  a  comprehensive  understanding  of 
what  the  ncAV  plan  involved  and  owing  further  to  the  fact  that  on  the 
rolls  of  none  of  the  counties  are  the  segregations  made  as  contemplated 
in  the  amendment,  it  was  found  impractical  to  secure  the  necessary 
information  by  correspondence.  It,  therefore,  became  necessary  to  send 
an  agent  into  the  field  to  visit  the  county  seats  and  secure  the  needed 
data.  The  agent  went  through  the  indexes  to  the  assessment  rolls  and 
took  off  the  name  of  every  corporation  of  the  classes  affected  by  the 
amendment.  He  then  took  from  the  assessment  rolls  the  valuations 
assessed  against  each  company  and  all  the  taxes  paid  thereon.  This 
affords  the  basis  for  the  computation  of  the  effect  of  the  amendment 
on  each  county.  In  a  few  counties  not  visited  by  the  agent  the  data 
was  furnished  by  the  assessor  and  in  every  case  certified  to  by  him  as 
correct  and  complete. 

The  commission  then  wrote  to  each  of  the  corporations  of  the  classes 
affected  whose  names  had  been  found  on  the  assessment  rolls,  and 
obtained  from  them  a  statement  of  their  gross  receipts  for  the  year  1909. 
The  gross  receipts  of  the  railroads  assessed  by  the  state  board  of  equali- 
zation were  obtained  from  the  sworn  reports  on  file  with  that  board  and 
of  the  accuracy  of  which  that  board  had  satisfied  itself.  In  other  cases 
they  were  obtained  over  the  signature  of  the  responsible  officers  of  the 
companies  and  verified  in  many  cases  by  reference  to  the  printed  reports 
to  stockholders,  etc.,  by  reference  to  the  reports  to  the  interstate  com- 
merce commission,  to  the  bank  commissioner,  to  the  insurance  commis- 
sioner, by  the  returns  of  the  United  States  census  and  by  every  other 
source  of  information  to  which  the  commission  had  access.  The  com- 
mission is  satisfied  that  the  returns  are  correct  and  that  the  computations 
based  thereon  are  reliable.  In  some  few  cases  companies  were  inclined 
to  be  recalcitrant  and  to  refuse  the  information,  but  a  sharp  letter 
citing  the  plenary  powers  with  which  the  commission  is  vested  invari- 
ably brought  forth  the  information  required. 

To  give  some  idea  of  the  immense  amount  of  work  involved  it  may 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  21 

be  stated  that  the  data  taken  from  the  assessment  rolls  covers  some  five 
hundred  sheets  14  by  17  inches,  with  thousands  of  entries,  and  that  over 
three  thousand  letters  were  written  to  the  different  companies,  etc.,  for 
information.  It  may  be  added  that  this  is  the  third  time  this  herculean 
task  has  been  undertaken  by  the  commission. 

The  effect  on  each  of  the  counties ;  how  computed. 

If  complete  separation  of  state  from  local  taxation  is  attained  under 
the  amendment  there  will  be  no  state  tax  on  property  subject  to  local 
taxation.  This  is  the  gross  gain  to  the  counties  or  rather  to  the  tax- 
payers therein.  But  as  the  property  of  the  companies  that  are  to  be 
taxed  for  state  purposes  is  withdrawn  from  local  taxation  the  remaining 
property  will  have  to  make  good  the  amount  of  taxes  formerly  paid 
thereon  in  order  to  raise  the  same  amount  of  money  for  local  purposes. 
The  difference  between  these  two  is  the  net  gain,  or  loss,  to  the  county. 
To  make  this  clear  the  following  example  is  cited.  In  Alameda  county 
the  companies  pay  to  the  county,  school  districts  and  so  on,  $151,154.81. 
Deducting  that  from  the  $704,858.34  which  property  owners  other  than 
those  of  the  companies  named  in  the  amendment  pay  in  state  taxes,  and 
which  they  would  save  under  the  amendment,  leaves  $553,703.53  net  gain. 
In  other  words  that  county  can  raise  the  same  amount  of  money  for  all 
local  purposes  with  an  average  tax  rate  28.6  cents  less  than  was  imposed 
in  1909. 

The  three  following  tables  show  the  computations  for  1905,  1908  and 
1909.  In  1908  the  attempt  was  made  to  collect  the  data  for  the  year 
in  which  the  amendment  was  to  be  voted  on.  But  the  assessment  is  not 
completed  until  after  the  first  of  September  and  the  time  between  that 
date  and  the  election  in  November  was  extremely  short  for  the  large 
amount  of  work  involved.  In  fact,  the  tabulation  was  not  printed  until 
within  a  very  short  time  before  the  election.  Too  short,  in  fact,  to  have 
it  properly  placed  before  the  voters.  This  undoubtedly  contributed  to 
the  defeat  of  the  amendment  in  that  year,  as  many  voted  *  *  no  "  simply 
for  lack  of  information.  This  also  explains  why  in  three  counties  the 
information  was  incomplete  for  that  year. 


22 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


TABLE  I. 


Showing  the  Gain  (op  Loss)  to  each  County  by  Separation  in   1905. 

49  Cents. 


State  Tax  Rate 


County. 


Net  gain  or 
loss  of 
county. 


Alameda 

Alpine   

Amador   

Butte  — 

Calaveras    

Colusa 

Contra  Costa  __ 

Del   Norte  

El  Dorado   

Fresno 

Glenn  

Humboldt  

Inyo   

Kern  

Kings  

Lake    

Lassen 

Los  Angeles 

Madera  

Marin 

Mariposa  

Mendocino 

Merced 

Modoc  

Mono  

Monterey  

Napa    

Nevada  

Orange    

Placer    

Placer    

Riverside    

Sacramento    

San  Benito 

San   Bernardino 

San   Diego    

San  Francisco  _ 
San  Joaquin  ___ 
San  Luis  Obispo 

San  Mateo 

Santa  Barbara  _ 
Santa   Clara   ___ 

Santa   Cruz  

Shasta    

Sierra 

Siskiyou  

Solano 

Sonoma   

Stanislaus  

Sutter   

Tehama    

Trinity    

Tulare  

Tuolumne    

Ventura    

Yolo  

Yuba    

Totals 


^Loss. 


$211 

2 

17 
42 
20 
47 
67 
15 

7 

108 

35 

95 

8, 
32 
23, 
15, 
22, 
617, 

4, 
44, 

3, 
44, 
31, 
20, 

3, 
45. 
50, 

6, 
41, 
10, 
10, 
13, 
75, 
24, 
62, 
33, 
1,615, 
97, 
39, 
72, 
48, 
225, 
33, 
13, 

5, 

1, 
66, 
92, 
29, 
21, 
33, 
10, 
32, 
22, 

56, 
IO3 


614  97 
295  09 
245  21 
271  26 
358  57 
332  18 
361  22 
196  22 
207  93 
051  85 
381  69 
934  86 
538  85 
320  77 
258  01 
378  54 
059  03 


228  29 
280  34 
339  45 
037  98 
657  06 
891  33 
913  87 
113  63 
351  99 
482  35 
620  59* 
620  59* 
747  57 
029  05 
032  06 
827  77* 
238  19 
035  36 
718  95 
843  52 
959  23 
770  45 
548  87 
643  69 
464  21 
153  03 
667  27 
110  38 
952  46 
810  63 
862  86 
553  22 
132  18 
409  38 
983  14 
698  84* 

136  36 

137  70* 


$4,285,118  01 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


23 


TABLE  II. 


Showing  Gain  (or   Loss)  to  each   County   by  Separation  in  1908. 

Cents. 


State  Tax  Rate  40 


County. 


Net  gain  or 

loss  of 
.  county. 


Gain  or  loss 
in  tax  rate 
of  county. 


Alameda 

Alpine   

Amador 

Butte  

Calaveras   

Colusa    

Contra   Costa    _. 

Del  Norte  

El  Dorado   

Fresno    , 

Glenn  

Humboldt    

Inyo  

Kern  

Kings  

Lake    

Lassen    

Los  Angeles   

Madera  

Marin    

Mariposa  

Mendocino    

Merced    

Modoc  

Mono  

Monterey  

Napa    

Nevada  

Orange   

Placer  

Plumas  

Riverside   

Sacramento    

San  Benito 

San  Bernardino  _ 

San   Diego    

San   Francisco  __ 

San    Joaquin    

San  Luis  Obispo 

San  Mateo  

Santa  Barbara   _ 

Santa   Clara   

Santa   Cruz  

Shasta    

Sierra    

Siskiyou  

Solano    

Sonoma    

Stanislaus  

Sutter    

Tehama   

Trinity    

Tulare  

Tuolumne    

Ventura    

Yolo  

Yuba    


Totals    _ $3,089,597  75 


$498,130  38 

2,010  32 

6,570  06 

24,813  81 

15,643  02 

36,189  05 

75,000  OOt 

14,934  83 

6.020  70 

85,065  61 

14,051  80 

82,502  28 

11,047  04 

147  55 

20,358  01 

14,637  58 

16,161  77 

69,229  72 

5,161  67* 

43,235  11 

4,084  81 

37.356  52 
6,102  92 

20,003  98 
3,453  14 

31.357  14 
37,781  96 
11,628  93 
24,661  60 
25,083  10 
14,246  22 

4,173  35^ 

118,138  26 

17,472  43 

50,000  00+ 

60,917  84 

712.040  40 

61,821  31 

27,256  46 

79,892  34 

36,310  34 

190,987  48 

27,563  49 

5,234  5r 

3,023  79 

6.187  43 

46,692  73 

70,699  78 

20,236  51 

9,793  49 

13,361  88 

10,434  23 

14,892  78 

12,902  18 

J 
43,063  96 
14,941  04 


29.10  cents 
40,00  cents 
13.60  cents 
13.95  cents 
26.70  cents 

30.10  cents 
30.00  cents 
38.91  cents 
12.20  cents 
19.70  cents 
13.40  cents 

31.15  cents 
30.40  cents 
00.00  cents 
23.00  cents 
39.80  cents 
27.40  cents 

22.16  cents 
7.16  cents 

26.37  cents 
18.78  cents 

27.89  cents 
4.24  cents 

38.67  cents 
27.32  cents 
15.83  cents 
26.70  cents 
18.00  cents 
14.60  cents 
35.40  cents 

27.40  cents 
2.48  cents 

23.18  cents 
26.88  cents 
29.00  cents 

21.41  cents 
17.80  cents 
16.91  cents 

18.47  cents 
22.55  cents 
13.57  cents 
32.12  cents 

18.11  cents 
4.26  cents 

14.50  cents 
4.66  cents 

24.90  cents 
22.40  cents 

14.48  cents 
15.60  cents 

12.19  cents 
37.14  cents 

7.18  cents 
19.30  cents 

26.75  cents 
25.60  cents 


18.16  cents 


*Loss. 

tReturns  lacking,  estimated. 

JNo  returns. 

Note.— The  amendment  of  1908  allowed  San  Bernardino,  Placer,  and  Yuba  counties 
a  reimbursement  for  a  term  of  years  of  the  taxes  lost  to  them  on  railroad  property. 
This  turned  an  apparent  loss  into  a  gain  as  above  shown. 


24 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


TABLE  III. 
Showing  the  Gain  (op  Loss)  to  each  County  hy  Separation  in  1909. 


County. 

Net  gain  or 
loss  of 
county. 

Gain  or  loss 
in  tax  rate. 

Alameda                -            -                  -    

$553,703  53 

1,248  33* 

8,490  47 

8,945  34* 

9,666  06 

28,656  29 

40,441  87 

14,368  45 

4,318  16 

64,530  90 

7.898  54 

71,770  77 

67,609  22* 

6,953  77 

2,338  49 

9,220  67 

12.668  80 

13,579  55 

1,001.185  00 

16.638  14* 

31,560  44 

6.663  46 

27.943  31 

6,796  59* 

18,053  99 

3,197  31 

30,194  70 

19,734  19 

14,039  58* 

51,011  56 

49,174  94* 

11,456  97 

3,604  86* 

68.634  74 

14,074  20 

131,449  45* 

56,491  27 

731,094  67 

57,070  87 

10,014  18 

71,644  28 

38.817  22 
194,973  59 

38,729  79 
16,412  88* 
3.501  49 
24.081  83* 
30,519  28 

57.818  81 
19.251  31 

7.670  08 
2.752  69* 
9.078  54 
55,287  60 
11,987  87 
34,933  96 
41.401  53 
15,487  28* 

28.6 
33.3 
17.6 

5.04 
35.5 
23.9 
14.4 
36.3 

8.7 
10.8 

7.1 

26.07 

112.4 

18.6 

.7C 

8.3 
35.2 
23.0 
20.04 
22.5 
18.5 
28.1 
19.8 

4.2 
32.4 
25.6 
12.4 
13.8 
21.8 
18.3 
60.5 
21.9 

1.4 
13.4 
19.7 
45.1 
16.6 
15.3 
16.3 

6.7 
28.02 
13.8 
28.6 
21.4 
13.3 
16.4 
17.6 
15.4 
17.8 
10.2 
12.  OJ 

2.4 
32.1 
15.7 
16. 7f 
16.3 
22.2 
26.6 

cents 

Alpine     

cents 

Amador                                                 -  -       _____ 

cents 

Butte                 _      __          

Calaveras                                                                                   - 

cents 

Contra    Costa 

cents 

Del  Norte                                                                                 

cents 

El  Dorado 

cents 

Fresno 

cents 

Glenn                                                                     _         ________ 

cents 

Humboldt        __ 

cents 

Imperial _ 

cents 

Inyo      -_      _ _ 

cents 

Kern  ,_. 

cents 

Kings        __      _            __ _-  —    

cents 

Lake    

cents 

Lassen                                                               _ _  _ 

cents 

Los   Angeles     _      ___ - 

cents 

Madera                                                                          _            

cents 

cents 

Mariposa   ___ 

cents 

Mendocino         _    

cents 

Merced 

cents 

Modoc                   -         _    - - 

cents 

cents 

Monterey                                                 _    _ _ 

cents 

Napa    _          _ 

cents 

Nevada                                                                            _    _  

cents 

Orange                                _       

cents 

Placer     _  ___  — _!_ 

cents 

Plumas                                   _               __    __      _ 

cents 

Riverside _  _    

cents 

Sacramento                                                                    _      __           

cents 

San   Benito    — 

cents 

San   Bernardino 

cents 

San  Diego 

cents 

San   Francisco                                                                                  _        

cents 

cents 

San  Luis  Obispo 

cents 

San  Mateo _    _  _ 

cents 

Santa  Barbara  __ _  _  __  — 

cents 

Santa   Clara   _ _  _ __ 

cents 

Santa  Cruz _ __ 

cents 

Shasta -_     -__  __    _ 

cents 

Sierra    ___    

cents 

Siskiyou                                           ___ 

cents 

Solano 

cents 

Sonoma 

cents 

Stanislaus _ 

cents 

Sutter                                      

)  cents 

Tehama — _      _____         _  ___  ___ 

cents 

Trinity 

cents 

Tulare _ __                          

cents 

Tuolumne __    _  _  _    _ ___ 

)  cents 

Ventura     _  __ 

cents 

Yolo  __ __  _    -    

cents 

Yuba    —      -      

cents 

Totals    _                              _  _    ^_„  _  _ 

$3,244,381  40 

15.42 

cents 

*Loss. 
Note. — The  amendment  of  1910  allows  San  Bernardino  and  Placer  counties  a  reim- 
bursement until  1918  of  the  taxes  lost  to  them  on  railroa:d  property.     The  apparent 
loss  will  thus  be  turned  into  a  gain. 


REPORT  OP  COMMISSION  ON  REVENUE  AND  TAXATION.  25 

At  the  end  of  this  report  will  be  found  the  detailed  tables  for  each 
county  for  1909. 

The  effect  on  cities. 

In  1908  we  undertook  to  ascertain  in  detail  the  effect  of  the  amend- 
ment on  cities,  within  the  counties.  This  was  unnecessary  in  1909  as 
the  new  amendment  provides  that  the  counties  shall  provide  out  of 
their  general  funds  for  any  special  losses  incurred  by  districts  within 
their  boundaries.  It  should  be  pointed  out  in  this  connection  that  part 
of  the  $1,000,000  gain  made  by  the  county  of  Los  Angeles  will,  under 
this  provision,  go  to  equalize  the  burden  between  cities  in  that  county. 
In  the  end  the  net  gain  in  that  county  will  be  about  the  same  as  in  San 
Francisco,  which  is  a  city  and  county  in  one. 

On  the  sufficiency  of  the  state  revenues  under  the  amendment. 

The  State  of  California  derives  revenue  from  many  sources.  The 
most  important  are:  (1)  The  general  property  tax;  (2)  the  poll  tax; 
(3)  the  inheritance  tax;  (4)  the  fees  of  the  secretary  of  state;  (5)  the 
corporation  license  tax;  (6)  the  insurance  commissioner's  fees  and 
taxes;  (7)  the  income  from  state  property,  interest  on  investments,  and 
the  earnings  of  state  institutions.  The  only  one  of  these  that  is  affected 
by  the  amendment  is  the  first,  namely,  the  income  afforded  by  the 
general  property  tax.  The  purpose  of  the  amendment  is  to  abolish  the 
state  tax  on  property  in  general  and  to  supply  the  state's  need  from 
other  sources,  namely,  the  gross  earnings  taxes  on  public  service  cor- 
porations and  on  insurance  companies  and  the  percentage  tax  on  the 
stock  of  banks.  The  question,  therefore,  arises  as  to  whether  the  new 
sources  proposed  will  be  adequate  to  meet  the  state's  needs. 

The  legislature  at  each  biennial  session  passes  the  so-called  tax  levy 
bill,  in  which  it  fixes  the  total  amount  to  be  raised  by  an  ad  valorem 
tax  for  each  of  the  two  succeeding  fiscal  years.  This  is  divided  into  two 
parts:  (1)  the  amount  to  be  raised  for  the  general  fund,  covering  the 
expenses  of  the  regular  departments  of  the  state  government  and  the 
state  institutions,  and  (2)  the  amount  for  each  of  the  three  great  school 
funds.  The  latter  increases  steadily  as  the  number  of  school  children 
increases,  or  about  four  per  cent  per  annum.  The  former  increases 
from  year  to  year  with  the  needs  of  the  state  institutions;  as,  for 
example,  the  increase  of  the  inmates  of  prisons  and  asylums,  and  varies 
as  the  requirements  for  new  buildings,  etc.,  appeal  to  the  legislature. 
It  is  usually,  but  not  always,  true  that  the  tax  levy  is  larger  in  the  first 
of  the  two  years  after  a  session  of  the  legislature  than  in  the  second, 
because  the  legislature  makes  certain  appropriations  available  in  the 
first  year,  which  are  not  repeated  in  the  second.  The  following  table 
shows  the  tax  levies  from  the  fifty-first  to  the  sixty-second  fiscal  years, 


26  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

namely,  from  the  year  ending  June  30,  1900,  to  the  year  ending  June 
30,  1911 : 

Fiscal  year.  Tax  levy.  Tax  rate. 

Fifty-first  (1899-1900) —-  $6,575,497  60.1  cents. 

Fifty-second    (1900-1901) 5,520,997  49.8  cents. 

Fifty-third  (1901-1902) 5,419,506  48.     cents. 

Fifty-fourth    (1902-1903).-:—- - 4,419,506  38.2  cents. 

Fifty-fifth  (1903-1904) 7,959,428  56.1  cents. 

Fifty-sixth  (1904-1905) 7,359,428  53.5  cents. 

Fifty-seventh   (1905-1906) 7,210,556  49.     cents. 

Fifty-eighth  (1906-1907) — -  6,890,556  47.6  cents. 

Fifty-ninth  (1907-1908) 7,588,779  44.5  cents. 

Sixtieth  (1908-1909) _— 7,188,779  40.     cents. 

Sixty-first  (1909-1910) 7,729,776  36.4  cents. 

Sixty-second    (1910-1911) 7,279,776       not  yet  fixed. 

The  average  for  the  first  ten  years  in  the  table  is,  in  round  numbers, 
$6,600,000,  or  about  the  same  as  the  first  year;  the  average  of  the  last 
five  years  is  $7,300,000,  or  about  the  same  as  the  last  year.  As  nearly, 
therefore,  as  can  be  stated  the  increase  in  tv^elve  years  is,  in  round 
numbers,  $700,000,  or  roughly  ten  per  cent.  Adding  to  the  $7,300,000 
the  $700,000  raised  by  the  three-cent  tax  for  the  university  we  get 
$8,000,000  in  round  numbers  as  the  amount  required. 

The  following  tables  show  what  the  new  taxes  would  have  yielded  in 
each  of  the  three  years  for  which  the  investigations  have  been  made : 


TABLE  I. 
Estimate  of  State  Revenues  under  the  Commission's  Plan,  1905. 

Taxes  on — 

1.  Railroads,  including  street  railroads $3,800,(XX) 

2.  Express  companies  __ 120,000 

3.  Car  companies 75,000 

4.  Telegraph  and  telephone  companies 210,000 

5.  Light,  heat  and  power  companies 600,000 

6.  Franchises  500,000 

7.  Banks  1,500,000 


$6,805,000 


TABLE  n. 


Estimate  of  State  Revenues  under  the  Amendment  Submitted  in  1908,  based  on  the 
Assumption  that  it  was  in  Force  in  1908. 
Companies.  State  taxes. 

Railroads  and  street  railroads $3,792,780 

Car   companies   144,478 

Express  companies  87,010 

Telegraph  and  telephone  companies 331,047 

Gas  and  electric  companies 641,611 

Franchises    550,000 

Banks  and  increased  taxes  on  insurance  companies 1,798,250 

Grand  total . $7,525,176 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  27 

TABLE  III. 

Estimate  of  State  Revenues  under  the  Amendment  Submitted  in  1910,  Based  on  tlie 
Assumption  tliat  ttie  Amendment  was  in  Force  in  1909. 

Railroads,  including  street  railways _..$106,922,045  77  at  4%  $4,276,881  60 

Light,  heat  and  power  companies—. 28,059,807  37  at  4%  1,122,392  29 

Telephone  and  telegraph  companies. 10,418,791  09  at  31/2%  364,657  68 

Car  companies - 5,004,066  69  at  3%  150,122  00 

Express  companies 4,512,134  77  at  2%  90,242  69 

Insurance   companies — increased  taxes  at  1 1/2%  103,459  38 

Banks,  taxable  capital  .._ .-  149,818,045  18  at  6-10%  899,908  30 

Franchises,  assessable  value 99,098,193  O0atl%  990,981  93 

$7,998,645  87 

Discussion  of  the  tables. 

In  comparing  these  three  tables,  it  should  be  borne  in  mind  that  some 
of  the  rates  in  the  amendment  of  1910  are  slightly  lower  than  those  in 
the  amendment  of  1908. 

As  was  explained  above,  the  figures  in  the  foregoing  table  are  accu- 
rate and  reliable.  The  gross  receipts  of  the  steam  railroads  are  as 
reported  to  the  state  board  of  equalization  and  checked  over  by  them. 
The  names  of  the  other  railroads  and  of  the  street  railroads,  also  of  the 
power  companies,  telephone  and  telegraph  companies,  car  companies, 
and  express  companies  were  taken  from  the  assessment  rolls  and  the 
gross  receipts  were  reported  to  the  commission  by  the  auditor,  president 
or  some  other  responsible  officer  of  each  company.  These  returns  were 
again  checked  by  comparison  with  the  returns  in  this  year's  published 
statements,  and  every  other  source  of  information.  The  returns  on  the 
banks  were  obtained  from  the  superintendent  of  banks,  who  transmitted 
them  in  the  following  letter : 

Alden  Anderson,  Superintendent. 

Banking  Department,  State  of  California, 
Office  of  Superintendent, 

San  Francisco,  Cal.,  May  27,  1910. 
Hon.  J.  B.  Curtin,  Sonora,  Cal. 

Dear  Sir:  In  response  to  your  request  of  the  24th  inst.,  for  certain  information 
relative  to  the  state  banks  of  California  as  of  the  first  day  of  July,  1909,  I  take 
pleasure  in  stating  that  the  capital  stock,  surplus  or  reserve,  and  undivided  profits 
of  state  banks  as  of  June  30,  1909,  in  accordance  with  the  records  of  this  office,  were 
as  follows : 

Capital    ____ $63,675,069  32 

Surplus  or  reserve 26,400,101  75 

Undivided  profits   ___ ___     14,981,169  80 

Total    __ $105,056,340  87 

The  corresponding  figures  for  national  banks  in  this  state  are  taken  from  the  report 
of  the  comptroller  of  the  currency  under  date  of  July  16,  1909,  and  relate  to  the  con- 
dition as  of  June  23,  1909 ;  and  are  as  follows  : 

Capital    $36,292,800  00 

Surplus  or  reserve 16,337,569  01 

Undivided  profits  ._ ____ 8,412,483  30 

Total    _  $61,042,852  31 

Yours  very  truly, 

(Signed)  Alden  Anderson, 

Superintendent  of  Banks. 


28  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

The  total  capital,  surplus  and  undivided  profits  reported  by  the 
superintendent  of  banks  amounts  to  $166,099,193.18,  from  which  is  to 
be  deducted  $16,281,148.00  of  real  estate  assessed  by  the  assessors,  leav- 
ing $149,818,045.18  of  capital  taxable  by  the  state,  upon  which  the  six 
tenths  of  one  per  cent  tax  gives  $898,908.30. 

The  data  concerning  the  insurance  taxes  were  taken  from  the  books 
of  the  insurance  commissioner.  The  gross  premiums  collected  were 
$34,110,664.21,  upon  which  the  taxes  at  one  and  one  half  per  cent  would 
amount  to  $511,659.96.  From  this  we  deduct  $408,200.58,  the  taxes  now 
paid  by  the  insurance  companies,  giving  the  increase  of  $103,459.38, 
which  alone  is  carried  into  our  estimate  of  revenue. 

The  probable  revenue  from  the  one  per  cent  tax  on  the  value  of  fran- 
chises has  been  estimated  on  the  following  basis.  The  assessors  in  1909 
returned  $19,907,353  as  the  assessment  placed  on  franchises  other  than 
those  of  banks,  and  public  service  corporations  named  in  the  amend- 
ment. That  this  is  very  inadequate  and  far  below  the  requirements  of 
the  law  is  a  well  known  fact.  In  twenty-eight  counties  no  such  fran- 
chise assessments  were  returned.  The  reason  for  the  inadequate  assess- 
ment of  franchises  is  also  well  known.  The  present  revenue  law  (see 
section  3628,  Political  Code)  provides  that  ''Other  franchises  (other, 
that  is,  than  the  franchises  of  railroads  operated  in  more  than  one 
county)  if  granted  by  the  authorities  of  a  county,  city,  or  city  and 
county,  must  be  assessed  in  the  county,  city,  or  city  and  county  within 
which  they  are  granted ;  if  granted  hy  any  other  authority,  they  must 
he  assessed  in  the  county  in  which  the  corporations,  firms,  or  persons 
owning  or  holding  them  have  their  principal  place  of  business.''  This 
provision  was  originally  intended  to  prevent  double  taxation ;  that  is, 
the  taxation  of  the  franchise  in  several  counties,  but  it  has  become  a 
means  of  enabling  the  companies  to  evade  any  tax  on  their  franchises. 
For  example,  in  1907  the  assessor  of  San  Francisco  assessed  the  Asso- 
ciated Oil  Company  for  $200,000  on  its  franchise,  and  before  the  next 
assessment  day  the  company  moved  its  "principal  place  of  business'*  to 
Oil  Center,  Kern  county,  California.  In  1910  the  Associated  Oil  Com- 
pany was  a^essed  in  Kern  county  for  its  real  estate  there  and  for  $8,700 
worth  of  personal  property,  but  no  assessment  was  found  against  the 
franchise,  unless  the  same  is  included  in  the  $8,700.*  There  are  many 
other  similar  instances  which  might  be  cited. 

In  the  leading  case  of  Spring  Valley  Water  Works  vs.  Schottler,  62 
Cal.  69,  and  other  cases  following  it,  the  supreme  court  has  repeatedly 

•It  must  be  distinctly  understood  that  the  commission  does  not  intend  to  cast  any 
discredit  upon  any  assessor.  The  assessor  who  does,  and  the  one  who  does  not,  assess 
franchises  is  each  acting  fully  within  the  limits  of  the  discretionary  power  conferred 
upon  him  by  law.  It  is  an  open  question  whether  merely  changing  on  the  books  of 
the  secretary  of  state  the  technical  location  of  the  "principal  place  of  business"  moves 
any  property,  from  one  place  to  another.  But  it  does  bar  the  assessor  at  a  place 
where  the  principal  place  of  business  is  not,  from  making  any  assessment  on  the 
franchise. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  29 

approved  of  the  following  method  for  making  a  valuation  of  the  fran- 
chises of  every  class  of  corporation  for  purposes  of  taxation.  This 
method  consists  in  (1)  ascertaining  the  total  market  value  of  all  out- 
standing securities,  and  (2)  deducting  therefrom  the  assessed  value  of 
any  visible  or  tangible  property  which  belongs  to  the  corporation.  The 
amendment  makes  no  change  except  to  transfer  the  administration  of 
the  law  from  the  counties,  which  have  not  succeeded  in  collecting  these 
taxes,  to  the  state,  which  can  do  so  with  certainty  and  uniformity.  The 
commission  considers  this  one  of  the  strongest  features  of  the  new  plan. 
The  superintendent  of  licenses  in  the  office  of  the  secretary  of  state 
reports  that  there  are  15,011  corporations  in  the  state  subject  to  this 
tax.  That  number  is  exclusive  of  banks,  insurance  companies,  and  the 
public  service  corporations  whose  franchises  are  otherwise  taxed  under 
the  amendment.  These  corporations  have  an  aggregate  capitalization  of 
$220,765,350.*  Making  a  detailed  estimate  of  the  franchises  of  each  of 
these  corporations  and  not  valuing  any  of  them  over  $4,000,  which  is 
certainly  very  conservative,  we  obtain  a  total  valuation  of  $79,190,840. 
Adding  to  that  $19,907,353,  we  obtain  the  total  of  $99,098,193,  of  which 
the  one  per  cent  tax  is  $990,982. 

On  the  growth  of  these  revenues. 

There  is  no  doubt  but  that  the  new  plan  will  afford  growing  revenues 
to  meet  the  growing  needs  of  the  state. 

As  was  clearly  demonstrated  in  the  1906  report  of  this  commission, 
both  by  the  experience  of  other  states  and  by  a  demonstration  of  what 
would  have  been  the  experience  of  this  state  with  gross  earnings  taxes 
had  they  been  in  force  up  to  that  time  (see  pages  166  ff.  of  said  report), 
taxes  on  gross  earnings  grow  faster  and  more  steadily  than  an  ad 
valorem  tax  on  property.  When  we  remember  that  by  the  time  this 
amendment  goes  into  effect  we  shall  have  another  transcontinental  rail- 
way in  operation,  that  the  great  power  companies  are  but  just  coming 
into  their  full  earning  capacity  (their  earnings  grew  from  $13,540,000 
in  1908  to  $27,300,000  in  1909)  ;  that  correspondingly  the  street  and 
electric  roads  will  be  extended  (the  earnings  of  the  twenty-nine  street 
and  electric  railways  reported  by  the  United  States  census  in  1907  as 
$20,700,000  grew  to  $27,200,000  in  1909)  ;  that  the  use  of  oil  as  fuel  and 
of  power  from  the  mountains  is  rapidly  enlarging  all  our  industries 
and  consequently  enlarging  the  business  of  all  our  public  service  cor- 
porations and  that  of  the  banks  (the  capital  of  the  banks  grew  from 
$150,000,00  in  1905  to  $166,000,000  in  1909)  ;  that  the  completion  of 
the  Panama  Canal  will  have  the  same  effect;  then  we  can  not  but  be 
convinced  that  these  taxes  will  be  adequate  to  continue  the  state 's  expend- 

*At  the  end  of  the  report  will  be  found  a  table  showing  approximately  how  many- 
corporations  there  are  in  each  of  the  different  classes  under  the  corporation  license 
law. 


30  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

itures  along  all  the  present  lines  and  to  meet  their  growth.  It  must 
furthermore  be  borne  in  mind  that  the  sources  of  state  revenue  undis- 
turbed by  the  amendment,  notably  the  inheritance  tax,  the  corporation 
license  taxes  and  the  poll  tax,  have  been  growing  in  the  past  few  years 
so  fast  that  the  amount  required  by  the  state  from  the  property  tax,  for 
which  the  new  taxes  are  to  be  substituted,  has  been  practically  station- 
ary. This  is  shown  by  the  steady  decrease  in  the  tax  rate  from  an 
average  of  about  fifty  cents  before  1905  to  36.4  cents  in  1909.  Even  if 
in  some  one  of  the  first  few  years  when  the  new  system  is  being  fitted 
into  its  place  there  should  be  a  deficit,  it  can  certainly  not  reach  a 
million  dollars,  and  a  million  dollars  means  only  a  four-cent  tax  rate. 
That  is  not  enough  to  disturb  the  benefits  of  separation.  But  unless  the 
coming  legislature  makes  some  very  unusual  and  very  large  appropria- 
tions there  will  be  no  deficit,  as  the  result  of  our  investigation  shows. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  31 


SECTION  III. 

DISCUSSION  Of  THE  EfPECT  OF  THE  AMENDMENT. 

A.    Upon  local  taxation  in  the  counties. 

It  has  been  clear  for  years  to  every  one  familiar  with  the  working  of 
the  old  revenue  laws  that  one  of  the  chief  causes  of  the  undervaluation 
of  property  and  of  the  great  inequalities  between  individuals  is  the 
imposition  of  a  state  tax  on  top  of  the  county  and  other  local  taxes.  If 
the  state  tax  can  be  removed  entirely  or  reduced  to  a  minimum,  the 
excessive  burden  of  taxation  on  agricultural  real  estate  and  on  the 
smaller  real  estate  holdings  in  cities  will  be  removed. 

The  saving  to  the  taxpayers  in  the  counties  is  an  important  but  by 
no  means  the  most  important  consideration.  That  saving  comes  from 
the  fund  created  by  the  increased  taxation  of  public  service  corpora- 
tions, and  is  in  itself  one  measure  of  the  injustice  and  inequality  of  the 
present  system.  The  distribution  of  this  fund  among  the  counties  shows 
further  by  its  very  irregularity  the  inequities  of  the  present  system. 

If  the  state  tax  is  removed  the  assessor  can  value  the  property  at  its 
full  cash  value  without  as  now  fearing  either  that  his  constituents 
would  have  to  pay  too  much  state  tax  or  that  the  state  board  would 
discredit  him  by  reducing  his  valuation.  That  this  would  be  conducive 
to  greater  equality  between  individual  taxpayers  is  obvious.  But  it 
has  other  advantages.  For  example,  in  some  of  the  counties  that  are 
trying  to  raise  money  for  irrigation  and  to  attract  settlers  to  the  irri- 
gated lands,  the  lands  are  assessed  for  $10  or  $14  per  acre,  for  which 
the  owners  are  asking  from  $100  to  $200  per  acre.  Furthermore,  the 
bonds  for  irrigation  purposes  can  not  be  sold  in  the  amounts  necessary 
because  of  the  underassessment  of  the  lands.  When  the  would-be 
colonist  or  the  would-be  investor  looks  at  the  low  assessed  value  and 
compares  therewith  the  high  price  asked,  and  learns  that  the  tax  rates 
aggregate  $3  to  $4  per  hundred  he  is  naturally  very  loath  to  settle  or  to 
invest.  Make  the  assessment  conform  to  the  true  value,  make  them  tell 
the  truth,  and  thereby  reduce  the  tax  rates  to  the  lowest  possible  mini- 
mum and  these  difficulties  all  disappear. 

Not  least  among  the  advantages  would  be  the  removal  of  the  necessity 
for,  or  at  least  the  large  significance  of,  equalization  by  the  state  board. 


32  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

In  1909  the  state  board  raised  the  assessed  valuation  of  the  following 
counties  by  the  percentages  set  opposite  to  them : 

Alameda    10  per  cent 

Fresno    20  per  cent. 

Kern    20  per  cent. 

Kings    - 20  per  cent. 

Los  Angeles  40  per  cent. 

Monterey    20  per  cent. 

Orange    50  per  cent. 

Riverside    .__ , ^--^ . 40  per  cent. 

San   Bernardino    33i^  per  cent. 

San  Francisco  10  per  cent. 

San   Joaquin   15  per  cent. 

Santa  Barbara  25  per  cent. 

Santa  Clara 10  per  cent. 

Santa   Cruz   15  per  cent. 

Stanislaus    25  per  cent. 

Tulare   20  per  cent. 

Ventura    100  per  cent. 

Yolo   15  per  cent. 

The  effect  on  the  property  owners  in  some  of  these  counties  was  fore- 
told by  the  state  board  in  its  report  of  1907-8  in  these  words : 

"The  duties  of  the  state  board  of  equalization  in  the  matter  of  assessment 
equalization  are  such  as  to  excite  the  antagonism  of  nearly  every  property 
holder  in  the  state,  at  least  in  those  counties  where  the  delinquencies  of 
assessors  call  for  action  of  the  board  in  increasing  the  rolls  of  the  county." 

If  there  were  no  state  tax  there  would  be  no  feeling  whatever  about 
such  action  by  the  state  board.  A  raise  would  be  regarded  as  a  compli- 
ment and  a  reduction  only  mildly  resented. 

The  saving  of  the  annoyance,  friction  and  expense  of  state  equaliza- 
tion alone  will  be  of  the  utmost  importance. 

If  some  system  of  separation  is  not  adopted,  far  more  drastic  methods 
of  equalization  must  be  devised.  The  injustices  of  the  present  system 
Avill  not  be  tolerated  much  longer.  For  efficient  equalization  the  state 
board  must  be  granted  far  greater  powers  than  it  now  has.  It  must 
have  control  over  the  assessors.  In  states  like  Indiana,  Kansas,  and 
New  Jersey,  which  instead  of  adopting  separation  have  tried  to  patch 
up  the  old  general  property  tax,  the  assessors  have  been  placed  abso- 
lutely under  the  command  of  state  boards,  who  give  them  detailed 
instructions  and  orders  which  if  disobeyed  entail  the  dismissal  of  the 
assessors  from  office.  In  some  states  the  central  board  virtually  makes 
every  assessment  and  the  local  assessors  are  appointed  by  the  board.  If 
separation  be  not  adopted  some  such  methods  must  be.  But  the  com- 
mission believes  that  it  is  better  to  leave  the  counties  to  manage  their 
own  financial  affairs.  The  county  assessor  can  not  serve  two  masters ; 
he  is  the  servant  of  his  constituents,  and  he  can  not  at  the  same  time 
serve  the  state. 


REPORT  OP  COMMISSION  ON  REVENUE  AND  TAXATION.  33 

Distribution  of  gains  and  losses  between  counties. 

The  distribution  of  the  gains  and  losses  between  the  counties  appears 
to  be  very  uneven  and  varies  from  time  to  time  as  shown  in  the  tables. 
Thus,  some  counties  which  gain  in  one  year  lose  in  another,  and  the 
proportionate  gain  or  loss  varies  from  year  to  year.  This  may  require 
explanation.  The  fundamental  reason  for  this  is  to  be  found  in  the 
inequalities  and  irregularities  of  the  present  system.  The  inequalities 
between  the  counties  vary  from  year  to  year.  In  one  year  certain 
counties  succeed  in  evading  their  state  taxes  in  large  part.  But  per- 
haps the  next  year  other  counties  follow  their  example  and  cut  away 
the  advantages  won  by  the  former  the  year  before.  Then  the  state 
board  steps  in  and  by  its  attempts  at  equalization  changes  the  gains  and 
losses.  To  compare  a  uniform  and  equitable  system  such  as  that  pro- 
posed in  Senate  Constitutional  Amendment  No.  1  with  an  ever  shifting, 
ununif  orm,  irregular  and  inequitable  system  like  the  present  one,  and  to 
criticise  the  new  one  whenever  it  produces  a  result  unfavorable  to  a 
certain  set  of  taxpayers  is  illogical.  The  comparison  in  all  such  cases 
will  show  only  the  defects  of  the  old  system.  He  who  loses  under  the 
new  system  is  losing  that  which  was  never  rightfully  his. 

When  in  1909  the  state  board  raised  certain  counties  it  increased 
their  state  tax  and  correspondingly  increased  the  amount  those  counties 
would  have  saved  under  a  system  of  separation.  Correspondingly  it 
reduced  the  amount  the  other  counties  would  have  saved. 

In  like  manner  the  increase  in  the  assessment  of  railroads  by  the 
state  board  diminishes  the  gain  in  many  counties  or  in  a  few  increases 
the  loss.  The  reason  for  this  may  be  stated  in  either  of  two  ways. 
First,  the  increase  in  the  taxation  of  the  corporations  diminishes  the 
fund  out  of  which  alone  the  gain  can  come ;  or,  it  increases  the  amount 
which  the  counties  must  make  up  from  other  property. 

It  ought,  therefore,  to  be  apparent  that  the  figures  for  the  gain  or 
loss  to  any  particular  county  have  no  permanency.  An  increase  of  the 
state  tax  rate  or  a  raise  in  valuation  will  increase  the  benefit  of  separa- 
tion of  state  from  county  taxes  to  each  county,  while  a  decrease  in  the 
state  rate  of  taxation  will  decrease  the  benefit  to  each  county  under  the 
present  ad  valorem  system.  If  for  purely  selfish  reasons  one  county 
which  would  gain  under  the  1905  assessment  might  favor  the  amend- 
ment, that  same  county  might  lose  under  the  1909  assessment,  and 
therefore  be  opposed  to  the  amendment.  Each  varying  assessment  of 
railroad  property  or  change  of  state  rate  of  taxation  would  change 
the  amount  of  gain  or  loss  to  each  county,  and  therefore  the  merits  or 
demerits  of  this  amendment  should  be  considered  from  the  broad  stand- 
point of  the  utter  failure  of  the  present  system  of  taxation  to  distribute 
the  burden  of  taxation  equally,  or  anywhere  near  equally,  while  the 

3— RT 


34  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

proposed  amendment  will  more  equally  distribute  the  burden  of  tax- 
ation and  provide  a  method  of  taxation  by  which  a  large  amount  of 
property  that  can  not  be  taxed  at  all  under  the  present  system  will  be 
reached. 

The  counties  have  no  just  complaint  to  make  against  the  withdrawal 
of  the  property  of  public  service  corporations  from  local  taxation  when 
in  return  they  are  granted  exemption  from  the  state  tax.  All  of  the 
property  withdrawn  is  property  of  state-wide  use;  none  of  it  is  local. 
The  real  estate  of  banks  is  still  to  be  subject  to  local  taxation,  the  stock 
is  at  present  not  taxed.  In  return  the  state  not  only  exempts  local 
property  from  state  taxation  but  it  contributes  over  one  half  its  income 
to  the  support  of  the  local  schools ;  it  cares  for  the  criminal,  the  insane, 
and  orphans  for  every  locality  and  in  many  ways  relieves  the  local 
finances  of  expenses.  It  is  sometimes  argued  that  the  counties  are  put 
to  expense  in  protecting  property  of  the  classes  withdrawn  from  local 
taxation.  This  argument  overlooks  the  great  share  of  local  expenses 
borne  by  the  state.  Out  of  a  total  of  $13,931,997.56  collected  from  all 
sources  by  the  state  in  the  fifty-ninth  fiscal  year,  $6,832,277.71  was 
spent  in  w^ays  which  directly  lessen  local  expenses ;  that  is,  for  the  com- 
mon schools,  the  state  hospitals,  and  prisons,  and  the  like,  which  but  for 
the  state 's  bounty  would  be  normally  a  purely  local  expense.  The  coun- 
ties contributed  toward  this  by  the  general  property  tax  $7,761,821.99, 
but  received  back  from  the  state  $1,557,782.72  in  railroad  taxes,  leaving 
only  $6,204,039.22.  In  short,  the  state  gave  the  counties  services  cost- 
ing it  $6,832,277.71  for  a  cost  to  them  of  $6,204,039.22,  or  $600,000  less. 

B.     The  effect  on  corporations. 

Each  of  the  taxes  proposed  for  each  of  the  different  classes  of  corpo- 
rations is  a  more  just  and  a  more  effective  tax  for  that  class  of  corpora- 
tions than  the  ad  valorem  tax  now  in  force.  Let  us  examine  them  indi- 
vidually. 

i^^Vs^— The  great  railroads.  Under  the  present  system  the  state 
board  of  equalization  is  required  to  make  a  valuation  of  the  roadway, 
roadbed,  rails,  rolling  stock,  and  franchises  of  all  railroads  operating 
in  more  than  one  county,  while  the  assessors  are  required  to  value  the 
stations  and  other  structures,  real  estate  off  the  right  of  way  (160  feet 
wide),  and  the  personal  property  other  than  rolling  stock  and  fran- 
chises. The  task  set  the  state  board  alone,  if  the  full  intent  or  hopes  of 
the  f  ramers  of  the  constitution  were  to  be  carried  out,  is  one  of  the  great- 
est difficulty.  Great  railway  systems  can  not  be  valued  by  the  simple 
methods  used  for  valuing  live  stock.  Even  the  great  banking  houses 
and  financial  syndicates  which  handle  railway  stocks  and  bonds  do  not, 
with  all  their  resources  in  the  way  of  expert  engineers  and  highly  paid 
accountants,  ever  undertake  so  intricate  a  task,  yet  the  state  lays  this 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  35 

task  on  the  shoulders  of  five  men  elected  by  the  people  and  as  a  sort  of 
by-play  to  other  very  arduous  and  important  duties.  Until  recently  the 
board  counted  the  miles  of  track,  the  number  of  locomotives  and  cars,  and 
guessed  at  their  value,  then  guessed  again  at  the  value  of  the  franchises 
and  reached  a  total — ^such  as  it  was.  What  wonder  that  they  gladly 
adopted  the  suggestion  of  this  commission  that  if  they  made  such  a 
valuation  that  the  total  taxes  would  equal  four  per  cent  of  the  gross 
earnings  they  would  be  doing  effective  justice.  Since  1906  the  assess- 
ment of  railroads  has  been  made  by  the  application  of  a  mathematical 
rule,  and  guess  work  has  stopped. 

Moreover,  the  board  can  now  defend  its  work  both  as  against  the 
criticisms  of  the  railroads'  tax  agents  and  before  the  public,  which  it 
could  not  do  before.  That  the  assessors,  in  turn,  can  know  nothing 
about  the  value  of  a  station  building  used  as  part  of  a  great  transconti- 
nental transportation  plant  is  too  obvious  to  need  mention. 

Then  there  is  the  difficulty  of  apportioning  these  taxes.  At  present 
the  assessed  valuation  is  apportioned  among  the  counties  on  a  mileage 
basis  and  taxed  by  the  counties  as  they  please.  That  sparsely  popu- 
lated rural  districts  should  levy  tolls  on  passing  commerce  sufficient  to 
enable  them  to  meet  all  their  local  expenses  is  too  rankly  unjust  to  be 
tolerated.  The  proceeds  of  the  taxes  on  the  great  agencies  of  commerce 
belong  by  right  to  the  people  of  the  state  as  a  whole. 

For  example,  in  1909  San  Bernardino  county  received  from  the  state 
treasury  $213,747.37  in  railroad  taxes  collected  in  her  behalf.  She 
paid  into  the  state  treasury  on  the  general  property  tax  $86,633.34,  or 
$127,114.03  less.  In  the  twelve  years  from  1899  to  1910  that  county 
received  from  the  state  in  railroad  taxes  and  for  the  common  schools, 
high  schools,  and  orphans,  a  total  of  $2,240,905.01,  and  she  paid  into 
the  state  treasury  in  poll  tax,  property  tax,  inheritance  tax,  sale  of 
school  lands,  and  all  other  sources,  only  $1,213,604.69.  In  short,  in 
twelve  years  the  rest  of  the  state  has  contributed  $1,037,300.32  to  the 
support  of  local  government  in  San  Bernardino  county.  (For  details 
see  table  at  the  end  of  this  report.) 

On  the  other  hand,  the  gross  earnings  tax  on  railroads  is  simple  of 
administration,  can  not  be  evaded,  and  can  be  enforced  without  the 
exercise  of  judicial  discretion  on  the  part  of  any  official.  It  is  always 
in  exact  proportion  to  the  ability  of  the  companies  to  pay,  and  the 
returns  increase  as  the  state's  needs  increase. 

What  has  just  been  said  as  to  steam  railroads  applies  equally  to  street 
railroads.  Even  an  assessor  of  great  ability  and  unusual  experience 
can  only  guess  approximately  at  the  value  of  these  complex  properties. 
The  attempted  valuations  are  always  in  dispute  and  the  subject  of  end- 
less squabbles  and  scandals.     This  is  all  unnecessary  when  a  simple. 


36  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

effective,  and  just  method  of  taxation  is  available,  namely,  a  tax  in 
I)roportion  to  gross  earnings. 

Turning  now  to  the  great  power  compaqies.  Here  we  have  a  new 
development  that  is  far  outside  the  present  plan  of  taxation,  and  has 
sprung  up  since  it  was  adopted.  In  1880  the  assessment  of  railroads 
was  turned  over  to  a  state  board,  because  it  was  obvious  that  they  should 
be  valued  as  a  whole  and  not  in  odd  sections  by  counties.  Had  the 
great  power  companies,  which  now  stretch  from  the  Sierras  to  the 
ocean,  been  in  existence  then  we  might  very  appropriately  have  treated 
them  the  same  way.  Clearly  the  county  assessor  can,  by  scanning  the 
wires  as  they  cross  the  fields  in  his  county,  learn  little  of  their  value  in 
relation  to  the  whole  plant.  Moreover,  it  is  hard  to  see  why  the  counties 
where  the  power  is  made  should  have  the  lion's  share  of  the  taxes,  small 
as  they  are  under  the  present  system,  while  the  counties  where  the  power 
is  bought  and  used  and  whose  money  goes  to  pay  the  taxes,  get  little  or 
nothing.  Here,  again,  the  proceeds  of  the  taxes  levied  should  clearly 
go  to  the  state  at  large.  And  the  simplest,  easiest,  and  most  just  way 
of  taxing  these  companies  is  on  gross  earnings. 

The  express  companies  have  served  as  the  stock  illustration  of  the 
absurdity  of  an  ad  valorem  tax  on  a  great  going  concern.  In  the  famous 
"Ohio  Express  Company  cases,"  the  supreme  court  of  the  United 
States  points  out  the  absurdity  of  "taxing  a  business  that  earned 
$275,446  in  a  single  year  on  the  basis  of  $23,400  worth  of  horses,  wagons, 
and  safes."  ^ 

The  car  companies  are  on  all  fours  with  the  express  companies.  The 
Pullman  Company,  with  89  standard  and  46  tourist  cars  in  the  state,  in 
1908  earned,  according  to  the  state  board's  estimate,  over  $1,200,000. 
Until  the  state  board  applied  the  gross  earnings  method  to  the  assess- 
ment of  this  company  its  taxes  were  absurdly  low.  Cattle  car  com- 
panies earn  from  $200  to  $240  per  car  per  summer,  as  ascertained  by 
the  United  States  commissioner  of  corporations,  and  fruit  refrigerator 
and  oil  cars  earn  more.  Their  taxes  are  trivial  under  the  old  system. 
Exactly  the  same  is  true  of  the  telegraph  and  telephone  companies 
as  of  the  railroads  and  power  companies,  so  we  need  not  repeat  it. 

How  lamentably  our  tax  system  breaks  down  when  applied  to  banks 
is  well  known.  The  national  banks  are  not  really  taxable  at  all.  What 
they  do  pay  is  a  gift  of  free  will.  The  state  commercial  banks  can  easily 
evade  taxation  almost  entirely,  and  probably  two  thirds  of  what  they 
pay  is  a  free  gift,  while  the  whole  amount  is  insignificant.  The  savings 
banks,  on  the  other  hand,  are  "soaked,"  to  use  a  slang  term,  to  the 
full  extent  of  the  law.  Yet  many  of  our  sister  states  consider  that 
savings  banks  should  be  more  tenderly  handled  in  tax  matters  than  any 
other  classes  of  banks,  because  they  promote  thrift  and  house  the  savings 
of  the  workers. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  37 

We  have,  as  a  matter  of  fact,  no  choice  of  method  as  to  how  banks 
shall  be  taxed  unless  we  are  willing  to  let  the  national  banks  go  untaxed. 
Congress  has  decreed  to  the  states :  '*if  you  tax  national  banks  you  shall 
tax  them  thus  and  so;  and  furthermore,  if  you  do  not  tax  your  state 
banks,  also,  thus  and  so,  and  precisely  in  the  same  way  that  you  tax 
national  banks,  you  shall  not  tax  national  banks  at  all. ' '  Fortunately, 
the  method  prescribed  is  a  most  just  and  equitable  one,  and  one  at  once 
simple  and  easy  of  enforcement.  A  tax  on  the  capital  stock  is  a  tax  on 
what  the  bank  as  a  corporation  owns,  and  as  the  law,  public  opinion, 
and  business  necessities  require  that  the  capital  shall  be  in  proportion 
to  the  business,  such  a  tax  is  as  fair  between  bank  and  bank  as  any  tax 
can  possibly  be.  It  is  also  fair  to  the  rest  of  the  taxpayers,  as  it  covers 
all  that  the  bank  owns.  There  was  a  difference  of  opinion  between  the 
banks  and  the  commission  as  to  what  the  rate  should  be,  and  the  legis- 
lature sitting  in  judgment  between  us  decided  ' '  to  split  the  difference. '  * 
The  commission  is  ready  to  admit  that  the  bankers  presented  a  very 
strong  argument. 

As  to  the  insurance  companies,  they  are  not  now  subject  to  the  ad 
valorem  tax,  and  the  amendment  does  not  change  the  present  system 
except  in  so  far  as  it  proposes  to  extend  the  same  method  and  the  same 
rate  to  all.  Although  the  old-fashioned  insurance  agent,  especially  the 
life  insurance  solicitor,  was  once  prone  to  argue  that  insurance  should 
not  be  taxed  at  all,  it  is  now  generally  admitted  that  the  insurance 
companies  should  be  taxed,  and  that  the  premiums  collected  are  the 
proper  basis  of  such  taxation. 

As  to  franchises  we  have  already  explained  (page  28)  why  it  is  im- 
practicable to  assess  these  locally.  They  should  be  taxed  by  the  state 
by  one  uniform  method. 

As  to  the  adequacy  of  the  rates  of  taxation  proposed  we  may  refer  to 
the  long  and  detailed  discussion  of  all  the  points  involved  which  was 
given  in  the  1906  report  of  this  commission.  Nothing  has  been  brought 
out  in  the  four  years '  discussion  to  lead  us  to  feel  that  the  rates  were  in 
any  case  too  low. 


38        .  REPORT  OP  COMMISSION  ON  REVENUE  AND  TAXATION. 


SECTION  IV. 

DErECTS  Of  THE  PROPERTY  TAX  AND  GENERAL  ARGUMENT 

FOR  SEPARATION. 

Faults  of  the  old  system. 

The  report  of  this  commission  in  1906  gave  full  details  as  to  the  faults 
of  the  present  system  and  discussed  them  at  great  length.  The  sum- 
mary of  them  is  reprinted  here  for  convenience. 

1.  In  general,  the  present  system  of  taxation  does  not  meet  the  demands  made 
upon  it.  It  is  antiquated,  having  been  adopted  fifty  years  ago,  and  has  not  been 
revised  to  keep  pace  with  modern  conditions. 

2.  It  is  full  of  inequalities,  which  impose  a  handicap  on  the  growth  of  the  state, 
a  handicap  which  only  the  vigor  and  inexhaustible  energy  of  our  people  can  carry. 

These  inequalities  twist  and  distort  our  industries  and  prohibit  a  symmetrical 
development  of  our  resources.  They  place  an  undue  burden  upon  agriculture  espe- 
cially ;  the  foundation  of  our  wealth,  the  one  industry  which  most  fully  exploits  the 
great  natural  resources  of  the  state. 

3.  The  taxes  paid  by  farmers  in  California  are  equivalent  to  an  income  tax  of 
10  per  cent.  This  is  in  contrast  to  many  other  industries ;  for  example,  the  taxes 
paid  by  manufacturers,  which  amount  only  to  2  per  cent  on  income.  The  persons 
engaged  in  agriculture,  with  an  average  yearly  income  of  about  $500,  pay  $50  per 
capita  per  annum  in  taxes.  The  persons  engaged  in  manufactures,  with  an  average 
annual  income  of  $870,  pay  $17.50  per  capita  per  annum. 

,  4.  Our  chief  tax,  called  a  general  property  tax,  has  in  fact  become  a  real  estate 
tax.  Only  from  15  per  cent  to  18  per  cent  of  the  entire  taxes  are  levied  on  personal 
property. 

5.  The  amount  of  personal  property  on  the  tax  rolls  to-day  is  hardly  larger  than 
it' was  in  1872.         '  ' 

6.  National  banks  pay  no  taxes  at  all,  except  on  real  estate,  of  which  they  are 
not  permitted  to  hold  much,  by  the  provisions  of  the  federal  laws. 

7.  State  commercial  banks,  subject  to  our  tax  laws,  are  badly  handicapped  by 
tl^e  competition  of  the  untaxed  national  banks.  Many  of  them  have  become  national 
banks  partly  for  the  reason  that  they  would  not  then  be  subject  to  taxation. 

8.  State  commercial  banks,  to  live  at  all,  in  the  face  of  this  competition,  are 
forced  to  evade  taxation  whenever  possible  and  are  hampered  in  their  investments  by 
unwise  provisions  of  our  tax  laws. 

9.  Savings  banks,  which  harbor  the  savings  of  the  workers,  and  which  are, 
in  many  states,  granted  special  rebates  in  taxation  on  that  account,  are  the  only 
class  of  banks  which  pay  their  full  quota  of  taxes. 

'  10.  "Equalization,"  so  called,  does  not  equalize,  and  in  the  nature  of  things,  can 
not  equalize.  After  the  oflBcers  have  exhausted  their  best  efforts  in  this  direction 
there  are  inequalities — glaring  ones — between  real  estate  and  personal  property ; 
between  different  classes  of  personal  property ;  between  county  and  county  ;  between 
city  and  city ;  between  city  and  country  ;  between  man  and  man.  All  of  which  are 
rarely  removed  and  often  intensified  by  so-called  equalization. 

11.  The  original  inequalities  in  the  assessment  are  intensified  by  the  constant 
piling  up  of  tax  on  tax  on  the  same  base.  If  a  city  has  a  rate  of  $1.00,  which  may 
be  "reasonable"  enough,  there  often  comes  on  top  of  that  a  county  tax  of  another 
$1.00,  a  few  special  school  taxes,  or  a  sewer  tax,  or  a  tax  for  bonds,  or  a  levee  tax, 
or  a  drainage  tax,  etc.,  etc.,  until  the  effects  of  any  inequalities  in  the  original  assess- 
ment have  been  multiplied  anywhere  from  two  to  five  fold.  Aggregate  tax  rates  fall- 
ing on  city  property  range  from  $1.65  per  $100  to  $5.00  per  $100  of  assessed  valuation. 

12.  Counties  with  relatively  undeveloped  resources  often  have  very  high  tax  rates 
on  relatively  high  valuations,  while  some  of  the  richest  counties  enjoy  a  low  tax  rate 
on  low  valuations. 

13.  The  present  system  takes  the  revenue  derivable  by  taxation  from  large  general 
organizations,  like  the  railroads,  which  revenue  belongs  by  right  to  the  people  of  the 


REPORT  OP  COMMISSION  ON  REVENUE  AND  TAXATION.  39 

state  at  large,  and  distributes  it  most  inequitably  among  the  local  divisions  of  the 
state  which  have  no  proper  claim  to  it  whatsoever. 

14.  Under  the  present  system  it  is  impossible  to  adjust  the  burden  of  taxation 
equitably  between  different  classes  of  corporations. 

Some  further  illustrations  and  examples  of  the  seriousness  of  these 
faults  may  be  of  value. 

The  valuation  of  property  in  different  localities  is  very  unequal  and 
xis  long  as  there  is  a  heavy  state  tax  to  be  apportioned  on  the  basis  of 
assessed  valuations  it  will  continue  to  be  unequal.  There  is  but  one 
effective  remedy  available  and  that  is  to  remove  or  greatly  reduce  the 
state  tax  on  property  in  general.  Let  us  give  some  examples.  In  1909 
the  state  board  of  equalization,  in  the  crude  way  in  which  alone  it  can 
proceed,  raised  the  valuations  placed  by  the  assessor  on  property  in 
Ventura  county  100  per  cent,  or  from  $11,094,360  to  $22,188,720.  This 
year,  as  though  to  admit  the  justice  of  this  drastic  action,  the  assessor 
has  returned  the  valuation  placed  by  the  board  and  added  $600,000. 
thereto.  The  state  rate  last  year  was  the  lowest  on  record,  36.4  cents. 
If  the  valuation  placed  by  the  assessor  had  not  been  raised  Ventura 
county  would  have  saved^  even  with  this  low  rate,  some  $40,000  in  state 
taxes  which  other  counties  would  have  had  to  pay.  Incidentally,  one 
may  ask  the  question  whether  part  of  the  $600,000  of  new  valuation 
found  by  the  assessor  is  not  new  capital  which  has  ventured  into  the 
county  since  the  tax  rate. was  reduced  from  2%  per  cent  in  1908  to 
1.4  per  cent  in  1909.  Another  example :  Los  Angeles  county  w^as  raised 
40  per  cent  in  1909.  The  raise  was  bitterly  opposed,  but  the  state  board 
presented  uncontrovertable  figures  showing  the  justice  of  their  action. 
So  the  meaning  of  it  is  that  Los  Angeles  county  was  trying  to  unload 
nearly  $600,000  of  taxes  on  other  counties.  In  the  last  five  years  Los 
Angeles  has  saved  over  $2,750,000  in  state  taxes  by  this  method,  which 
amount  has  been  paid  by  other  counties.  One  more  example  from  the 
multitude  available.  San  Bernardino  county  not  only  virtually  receives 
a  large  bonus  each  year  in  the  way  of  taxes  on  railroads,  but  according 
to  the  state  board  was  last  year  33%  per  cent  undervalued.  The 
assessor  met  the  raise  and  added  $4,000,000  more  this  year,  showing 
that  in  his  opinion  the  raise  was  just.  Had  the  assessment  stood  that 
county  would  have  robbed  other  counties  of  $30,000  last  year. 

Probably  90  per  cent  of  the  voters  in  these  great  communities  do  not 
know  that  they  are  plundering  their  fellow  citizens  in  other  communi- 
ties in  this  manner  and  would  repudiate  it  if  they  could.  But  the  old 
system  not  only  permits  and  rewards  it  but  practically  forces  it  on  the 
assessors.  The  state  board  said  in  their  report  of  1908 :  *  *  The  strife 
between  counties  to  keep  their  assessments  down  to  the  lowest  notch  on 
account  of  the  state  tax  is  just  as  much  a  feature  to-day  as  it  has  been 
.at  any  period  in  the  state 's  history. '  * 


40  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

Equalization  no  remedy. 

The  supposed  remedy  for  these  conditions,  namely,  equalization  by 
the  state  board,  is  no  remedy.  It  is  a  punitive  measure  having  but 
little  good  effect  and  involves  great  evils  in  itself.  It  intensifies  existing 
inequalities  between  man  and  man.  The  board  can  only  raise  or  lower 
the  valuation  of  a  county  as  a  whole.  Yet  they  say  in  their  report  of 
]908:  "It  is  within  the  knowledge  of  members  of  the  state  board  that 
in  certain  counties  for  years  past  one  or  more  species  of  property  have 
been  grossly  underassessed  as  compared  with  other  species  of  property 
in  the  same  county;  time  after  time  attention  has  been  called  to  these 
discrepancies,  with  little  effect  in  securing  a  correction  of  the  same. 
Even  in  aggravated  cases  of  the  kind  the  state  board  is  naturally  averse 
to  raising  a  whole  county  assessment,  simply  because  one  class  or  species 
of  property  is  undervalued,  when  it  is  obvious  that  a  horizontal  raise 
will  do  serious  injustice  to  property  owners  who  are  already  assessed 
high  enough. ' ' 

Many  classes  of  property  undertaxed. 

Many  classes  of  property,  especially  those  held  by  public  service  cor- 
porations and  that  of  the  commercial  banks,  are  not  adequately  taxed. 
The  underlying  reason  for  this  is  not  corrupt  politics,  as  many  persons 
are  prone  to  assume,  but  the  simple  fact  that  these  classes  of  property 
or  the  methods  by  which  they  are  held  have  grown  up  since  our  now 
antiquated  tax  plan  was  devised  ancj  can  not  in  the  nature  of  things  be 
taxed  adequately  by  so  crude  a  method.  The  difficulty  is  not  peculiar 
to  California ;  it  exists  in  every  state  in  the  Union.  In  fact,  very  similar 
problems  confront  every  civilized  country  in  the  world.  The  bitter 
struggle  over  the  English  budget  turns  on  the  same  issue.  Germany, 
whose  tax  system  was  pronounced  ideally  perfect  in  1890,  is  already 
striving  by  new  taxes  to  reach  the  new  resources  which  during  the  past 
twenty  years  of  rapid  industrial  development  have  grown  up  outside 
the,  in  1890,  perfect  tax  system. 

Again,  let  us  take  concrete  examples:  When  the  commission  made 
its  first  careful  study  of  the  existing  conditions  in  1906  it  held  that  the 
classes  of  corporations  covered  by  this  amendment  were  undertaxed 
some  $4,000,000  and  more  annually.  Conversely,  of  course,  other 
property  paid  too  much.  Since  then  the  state  board  has  by  a  rough 
method  made  the  great  steam  railroads  pay  what  the  commission 
believes  they  should  pay,  and  in  a  few  cases  the  assessors  have  done  the 
same  with  street  railroads.  But  that's  a  bare  fourth  of  the  amount. 
The  agitation  of  this  question  has  in  four  years  poured  into  the  public 
coffers  some  $5,000,000  of  taxes  heretofore  escaped.  But  there  is  a  lot 
more  to  be  had,  and  we  can  have  it  right  away  if  the  amendment  is 
adopted. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  41 

THE   MEANING  OF  SEPARATION. 

(Reprinted  from  the  1906  Report.) 

Introduction  and  deflnition. 

The  separation  of  state  from  local  taxation  as  to  sources  of  revenue  has  come  to 
be  generally  recognized  as  the  one  feasible  pathway  for  tax  reform. 

As  this  commission  uses  the  term  "separation  of  sources"  it  means  that  the  coun- 
ties and  local  governments  shall  tax  only  the  private  or  individual  real  estate  and 
tangible  property  within  their  boundaries,  property,  that  is,  which  is  clearly  and  dis- 
tinctly localized.  This  class  of  property  has  a  distinctly  local  situs  and  benefits 
obviously  and  directly  by  local  government.  Upon  this  class  of  property  there  shall 
ultimately  be  no  state  tax.  The  state,  on  the  other  hand,  shall  tax  all  those  indus- 
tries, and  classes  of  property  sometimes  called  "corporate"  to  distinguish  them  from 
the  "private  or  individual"  industries  and  properties.  Such  property  does  not  have, 
in  the  same  sense,  a  local  situs ;  it  extends  over  many  communities,  serves  all,  and  all 
contribute  to  its  income.  Steam  and  electric  railroads,  telegraph  and  telephone  com- 
panies, express  companies,  insurance  companies,  banks,  trust  and  loan  companies, 
light,  heat,  and  power  companies,  all  of  these  have  no  distinct  local  situs,  as  does  a 
piece  of  land,  or  a  business  block.  The  characteristic  of  all  such  corporate  enterprise 
is  that  the  value  of  the  business  which  they  carry  on  in  any  particular  municipality 
is  more  or  less  intimately  dependent  upon  the  business  carried  on  by  them  in  one 
or  more  other  municipalities,  rural  or  urban,  and  can- not,  therefore,  be  properly  esti- 
mated or  taxed  in  any  one  place,  or  even  in  a  series  of  places.  Such  property  and 
industries  are  general.  They  belong  to  the  people  of  the  state  as  a  whole,  not  to 
any  particular  community  in  which  by  accident  their  rails,  wires,  or  oflBces  may  be. 

The  general,  non-local,  character  of  corporate  property  is  so  obvious  that  it  seems 
almost  superfluous  to  argue  that  the  taxes  thereon  do  not  belong  to  the  localities. 
But  as  this  idea  is  comparatively  new  in  practice  it  may  need  illustration.  A  car 
load  of  butter  and  cheese  may  be  shipped  from  Humboldt  county  by  water  to  San 
Francisco  and  thence  by  rail  to  New  Orleans.  On  its  way  it  will  pass  through  many 
counties.  We  should  hold  it  robbery  if  each  county  erected  toll  gates  and  collected 
tolls  on  that  car  load  of  Humboldt  products.  But  that  is  practically  what  we  allow 
when  we  permit  the  counties  to  tax  the  railroads.  Or,  again,  a  vineyardist  in  Napa 
may  ship  a  cargo  of  wine  to  London ;  a  San  Francisco  bank  buys  the  bill  and 
"finances"  the  operation.  San  Francisco  in  taxing  the  banks  virtually  levies  a  toll 
on  the  Napa  vineyardist's  goods.  Every  year  the  banks  bring  in  large  sums  of  money 
to  "move  the  crops."  This  money  goes  all  over  the  state,  even  into  localities  where 
there  are  no  banks.  Every  producer  in  the  state  contributes  to  the  profit  which  the 
banks  make  on  the  transaction.  Why  should  this  business  be  taxed  in  San  Fran- 
cisco, Stockton,  Sacramento  or  Los  Angeles  only?  The  business  is  general,  and  the 
taxes  on  it  should  be  for  the  support  of  the  state  government,  which  represents  all 
the  people  and  all  parts  of  the  state  alike.  Does  the  fact  that  San  Bernardino  county, 
Nevada  county,  and  Siskiyou  county  sit  at  the  gateways  through  which  the  railroads 
enter  the  state  give  them  a  right  to  tax  every  yard  of  cloth,  every  box  of  crackers, 
every  plow,  and  all  the  other  multitudinous  wares  which  the  people  of  this  common- 
wealth bring  in?  Many  counties  not  situated  on  the  line  of  any  railroad  nevertheless 
contribute  to  its  traffic.  By  what  right  are  they  to  be  deprived  of  the  taxes  levied 
on  this  traffic?  If  the  railroads  are  taxed  by  the  state  alone  and  for  state  purposes 
alone,  every  dollar  of  taxable  property  in  the  state,  whether  on  the  line  of  the  railroad 
or  not,  is  benefited,  for.  the  amount  paid  into  the  state  treasury  from  this  source 
lessens  the  tax  on  all  property  in  the  state. 

The  right  to  do  business  that  is  enjoyed  by  corporations  is  a  privilege  granted  by 
the  state,  and  not  by  the  cities  or  counties.  Therefore,  any  tax  that  may  be  levied 
upon  the  revenues  derived  from  the  enjoyment  and  use  of  the  state  privileges  used  by 
corporations,  especially  public  service  corporations,  ought  to  be  paid  into  the  state 
treasury  for  the  support  of  the  state  government,  from  which  the  privileges  are 
derived,  rather  than  into  city  and  county  treasuries. 

Obviously  there  is  a  perfectly  clear  line  of  demarcation  between  property  local 
in  character  which  would  be  subject  to  local  taxation  and  property  or  industries 
general  in  character  which  should  be  subject  to  general  or  state  taxation. 

To  accomplish  separation  it  is  necessary  to  define  clearly  and  sharply  the  boundary 
line  between  state  and  local  powers  of  taxation.  This  boundary  line  having  been 
once  defined,  neither  of  the  two  parties  shall  trespass  upon  the  territory  set  apart  for 
the  other.     It  implies  that  there  shall  be  an  end  to  the  everlasting  piling  up  of  rate 


42  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

on  rate  on  the  same  subjects  or  the  same  foundation,  which  is  the  bane  of  our  present 
system  of  taxation. 

Separation  will  give  the  counties  substantial  home  rule  in  matters  concerning  their 
own  taxation,  and  to  the  same  extent  there  will  be  home  rule  in  matters  concerning 
city  taxation. 

^  Within  strictly  defined  limits  the  county,  or,  respectively,  the  city,  should  be  per- 
mitted to  determine  its  own  policy  concerning  the  raising  of  revenue.  This  does 
not  preclude  general  laws  intended  to  bring  about  a  certain  amount  of  uniformity 
as  to  methods,  but  it  does  preclude  that  constant  deference  to  the  effect  of  state  or 
other  sur-taxes  which  tends  to  divert  the  attention  of  the  assessing  officers  from  their 
primary  duty,  which  is  to  establish  uniformity  and  equality  of  taxation  between  man 
and  man.  It  is  indisputable  that  separation  would  abolish  the  chief  incentive  to 
and  cause  for  undervaluations  and  remove  the  chief  source  of  the  existence  of  dis- 
criminations. 

Separation  would  at  once  abolish  all  the  evils  which  "equalization"  is  intended  to 
prevent,  but  which  it  unfortunately  fails  to  remedy. 

The  crude  assumption  that  each  and  every  interest  should  be  taxed  in  the  same 
way  in  proportion  to  the  property  which  it  uses  is  one  of  the  fundamental  iniquities 
of  our  present  system.  This  it  is  which  prevents  us  from  taxing  each  interest  in 
accordance  with  its  ability  to  pay. 

Theoretical  Considerations. 

The  theoretical  principle  for  .the  separation  of  state  from  local  taxation  is  found 
in  part  in  the  natural  distribution  of  functions  between  state  and  local  governments. 
The  activities  of  the  local  governments,  such  as  the  protection  of  property  by  the 
police,  the  fire  departments,  the  local  courts,  the  construction  and  maintenance  of 
roads,  streets,  bridges,  and  the  like ;  the  provision  for  schools,  the  care  of  the  sick 
and  of  the  poor,  redound  distinctly,  directly,  and  peculiarly  to  the  benefit  of  local 
real  estate  owners,  or  local  industries,  and  enhance  and  sustain  the  value  of  real 
estate  and  of  other  tangible  property  in  the  localities.  This  has  always  been  the 
ground  for  making  local  governmental  expenses  a  local  charge.  Separation  makes, 
no  change  in  this  respect,  but  it  does  propose  to  relieve  local  property  from  state  taxes 
and  from  the  expenses  of  general  activities,  the  benefits  of  which  are  not  directly 
traceable  to  the  activities  of  the  local  government. 

In  the  counties  outside  of  the  cities,  the  chief  local  industry  is  agriculture,  and 
it  seems  peculiarly  fitting  that  the  local  industries  should  bear  the  expenses  of  its 
own  protection  and  support  the  local  charges.  There  is  probably  no  better  way  of 
apportioning  the  taxes  among  a  group  of  farmers  for  the  support  of  the  charges  of 
the  local  government  than  by  the  taxation  of  real  estate.  The  property  tax  originated 
as  a  neighborhood  tax,  and  works  best  when  used  to  apportion  neighborhood  charges 
among  neighbors.  It  can  be  made  effective  only  among  a  group  of  persons  who  know 
each  the  other's  affairs  to  a  large  extent,  and  where  deception  and  concealment  is 
not  easy. 

In  cities,  generally,  it  is  the  growth  of  the  city  that  gives  value  to  real  estate. 
This  may  be  admitted  without  going  the  full  length  of  the  claims  of  the  single  taxers, 
that  it  is  the  activities  of  the  city  alone  which  give  value  to  real  estate.  From 
either  point  of  view  it  seems  proper  that  such  property  should  bear  the  greater  part 
of  the  expenses  of  the  city  which  creates  its  value.  Strong  arguments  have  been 
advanced  in  support  of  the  contention  that  the  local  expenses  should  be  limited  to 
the  amount  which  the  local  real  estate  can  afford  to  pay  ;  whether  these  arguments 
are  valid  or  not,  they  point  the  conclusion  that  real  estate  should  pay  the  local 
expenses. 

On  the  other  hand,  the  activities  of  the  state  are  all  broad  and  general.  This 
is  uniformly  recognized  in  the  constitutional  prof isions  now  found  in  almost  all  state 
constitutions  prohibiting  local  or  special  laws.  The  duties  of  the  state  are  mainly 
legislative.  It  provides  a  uniform  code  of  laws,  the  same  throughout  its  entire 
territory.  It  provides  laws  under  which  business  is  conducted.  It  grants  charters 
to  industrial  and  other  corporations.  It  administers  such  public  institutions  as  are 
in  no  sense  local  in  character.  In  general,  the  state  cares  for  all  those  interests 
that  are  too  broad  or  too  large  for  the  local  governments  to  handle. 

Corresponding  almost  precisely  to  the  general  activities  of  the  state  government, 
we  find  the  properties  and  business  of  the  great  public  service  corporations  which 
pervade  the  whole  state,  such  as  the  railroads,  the  telegraph  and  telephone  companies, 
the  express  companies,  and,  of  late,  the  light,  heat,  and  power  companies,  which  have 
spun  their  wires  like  a  spider's  web  over  many  communities,  or  the  insurance  com- 
panies and  the  banks,  whose  business  is  in  no  sense  confined  to  one  locality.     These 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  43 

industrial  corporations  are  distinctly  and  peculiarly  the  creatures  of  the  state,  and 
it  is  to  the  state  and  not  to  the  counties  or  the  cities,  that  we  naturally  turn  for  their 
regulation  and  control.  They  serve  the  people  of  the  state  as  a  whole,  and  are  pro- 
hibited from  bestowing  favors  on  any  one  community.  There  is  little  or  nothing 
localized  about  them,  nor  do  they  benefit,  save,  possibly,  in  so  far  as  their  local  fran- 
chises are  concerned,  in  the  same  peculiar  and  direct  manner  as  does  private  indi- 
vidual real  estate  by  the  activities  of  the  local  government. 

There  is,  thus,  ample  theoretical  ground  for  making  a  separation  as  to  the  sources 
of  state  taxation  from  those  of  local  taxation.  The  general  classes  of  corporations 
which  we  have  had  under  consideration  are  so  broad  in  their  activities,  their  stock- 
holders, and,  including  for  the  nonce  the  oft  forgotten  consumers  of  their  products, 
or  of  their  services,  are  so  widely  scattered  that  the  propriety  of  taxing  them,  where, 
by  some  accident  of  organization  or  of  legal  enactment,  their  head  office  may  be  or 
their  property  may  lie,  is  clearly  illogical. 

Practical  Considerations. 

The  practical  reasons  for  the  separation  of  state  from  local  taxation  are  : 

1.  Complete  separation  will  abolish  at  once  the  expense,  friction,  and  annoyance 
of  the  vain  attempt  to  equalize  between  the  different  counties.  Partial  separation 
will  lessen  this  evil,  because  as  the  proportion  of  state  taxes  to  the  total  tax  burden 
on  each  citizen  is  reduced  the  inducement  to  undervaluation  is  reduced  in  like  pro- 
portion. 

A  large  part  of  the  inequalities  in  the  assessment  have  their  origin  in  the  attempt 
of  assessors  to  save  part  of  the  state  burden  to  the  county  by  undervaluation. 

2.  When  separation  is  permitted  it  is  possible  to  place  each  tax  in  the  hands  of 
that  branch  of  the  government  which  is  best  adapted  to  administer  it.  The  taxa- 
tion of  public  service  corporations,  for  example,  whose  business  pervades  the  whole 
state,  can  not  be  adequately  handled  by  the  local  assessors.  In  every  case,  in  order 
to  obtain  any  sort  of  equality,  uniformity,  and  justice  in  the  treatment  of  these 
great  corporations,  it  is  necessary  to  call  in  the  assistance  of  a  state  board,  even  if 
the  resulting  taxes  are  distributed  among  the  localities.  This  is  one  of  the  several 
points  at  which  the  general  property  tax  breaks  down,  and  in  which  our  present 
administrative  organization  in  California  is  especially  weak.  If  we  have  separation 
of  sources  the  state  alone  would  deal  with  these  corporations.  This  would  save  a 
great  amount  of  friction  and  more  or  less  expense. 

The  different  classes  of  corporations  can  not  all  be  successfully  taxed  by  one  and 
the  same  method.  That  has  been  partly  recognized  in  California  already  in  the 
taxes  imposed  on  the  premiums  of  insurance  companies.  The  local  assessors  and 
other  administrative  officers,  engaged,  as  they  necessarily  will  be,  largely  in  the 
administration  of  the  local  taxes,  can  not  safely  or  wisely  be  intrusted  with  the 
administration  of  several  other  sorts  of  taxes.  Nor  have  these  officers  in  the  past 
shown  any  ability  to  handle  the  administration  of  broader  matters  concerning  taxa- 
tion. What  is  needed  is  separate  machinery  for  the  administration  of  each  of  the 
different  taxes. 

Separation  in  other  states. 

Many  of  the  eastern  states  have  achieved  tax  reform  along  the  lines 
very  similar  to  those  proposed.  That  is  by  separation.  The  details  of 
the  plan  vary  in  each  case  with  historical  and  local  conditions ;  no  two 
are  exactly  alike.  But  the  main  features  are  the  same.  The  general 
property  tax  has  been  relegated  to  use  for  local  purposes  and  the  state 
keeps  its  hands  off.  The  public  service  corporations  are  taxed  for  state 
purposes.  Pennsylvania  and  Connecticut  are  regarded  as  the  pioneers 
in  this  movement,  having  had  separation  for  many  years.  New  York, 
after  twenty-five  years  of  striving,  achieved  separation  about  1903. 
Wisconsin  reached  the  goal  after  many  years  of  effort  in  1909,  and  Min- 
nesota in  1910.  But  each  of  these  two  states  had  so  nearly  eliminated 
the  state  tax  some  years  ago  that  it  was  not  an  important  feature.    Vir- 


44  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

ginia  achieved  separation  by  revision  in  1902,  but  allowed  five  years 
for  a  transition  period. 

The  following  tables  show  how  these  states  do  it : 

Connecticut.     1908. 
No  state  ad  valorem  tax. 

Express  companies,  tax  on  $18,140  52 

Inheritance  tax  __ 278,370  76 

Insurance,  fees  and  taxes  on 155,050  43 

Investments,  tax  on 160,625  91 

Military  commutation  tax  163,283  06 

Mutual  fire  insurance  companies,  tax  on 5,082  70 

Mutual  life  insurance  companies,  tax  on 366,838  95 

Nonresident  stock  tax  __  134,393  12 

Railroads,  steam,  tax  on .  1,302,679  83 

Railroads,  street,  tax  on _  229,987  12 

Savings  banks,  tax  on  y. 555,559  35 

Telegraph  and  telephone  companies,  tax  on ___  74,231  35 

$3,444,243  10 
New  York.      1909. 
No  state  ad  valorem  tax. 

Excise _ $5,140,524  21 

Corporations  8,671,920  20 

Organization  of  corporations  343,938  99 

Inheritance  tax,  net 6,962,615  23 

Stock  transfers,  stamp  tax 5,355,546  16 

Mortgages,  registration  tax 1,844,821  45 

Racing   associations    -—  65,166  74 

$28,384,532  98 
Pennsylvania.      1909. 

Tax  on  capital  stock $9,916,840  41 

Tax  on  building  and  loan  associations __  14,459  69 

Tax  on  corporate  gross  receipts --- —  1,520,973  84 

Tax  on  bankers  and  brokers  and  notaries _ 20,813  58 

Tax  on  bank  stock 990,089  67 

Tax  on  bank  examinations  49,032  40 

Tax  on  incomes 44,533  29 

Tax  on  premiums 1,340,215  64 

Tax  on  gross  premiums 126,163  52 

Tax  on  corporate  loans 2,497,480  81 

Tax  on  personal  property  4,315,411  86 

Tax  on  inheritances  1,739,852  73 

Bonus  on  charters 516,265  55 

Licenses 3,156,413  92 

$26,248,546  91 
Virginia. 

Achieved   sepjaration   by   constitutional   revision   in   1902.      By   a  plan  v^hich   allowed 
five  years  for  a  transition  period. 

Banks    $129,669  22 

Insurance  bureau  17,504  46 

Inheritance  tax  38,397  28 

Charter  fees  25,590  20 

Corporation  tax   397,709  80 

Franchise  tax 105,715  00 

Insurance  licenses  and  taxes _ 167,594  96 

Income  tax 26,697  16 

Law  processes,  tax  on  185,230  66 

Licenses  other  than  liquor 458,250  45 

Licenses,  liquor 361,572  45 

Oyster  tax  65,580  95 

$1,979,512  59 


REPORT  OF  COMMISSION  ON  REVENUE  AND  T^VXATION.  45 

Wisconsin.     1908. 

Small   ad  valorem   tax.      Newspapers   reported   in   1909   that  Wisconsin  in    that  year 

became  a  "taxless  state." 

Property  tax _„_ — $696,043  87 

Railroads    _ _ 3,265,676  73 

Telephone  companies'  license — . ,-^-— 36,628  89 

Fire  insurance  companies  -___ -"_„^J _!___' 174,652  19 

Life  insurance  companies  _ 393,077  72 

Inheritance  tax  245,653  32 

Street  railways 22,207  31 

Telegraph  companies  _ _ 45,207  45 

Sleeping  car  companies 5,343  28 

Loan  and  trust  companies _ _ _ ___*_ 9,915  38 


$4,893,806  14 


46  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


SECTION  V. 

CITATIONS  FROM  AUTHORITIES,  ETC 

The  conclusions  of  the  commission  are  supported  by  the  best  author- 
ities on  taxation,  and  are  in  line  with  the  recommendations  of  very 
many  similar  commissions  in  other  states.  For  convenience  of  refer- 
ence we  bring  together  a  number  of  citations  in  point. 

The  Civic  Federation  of  Chicago  in  1907  published  a  summary  of 

the  recent  reports  of  special  tax  commissions  covering:    Reports  from 

the  following  states : 

Massachusetts    (3   reports). 

Vermont. 

Missouri   (2  reports). 

California. 

Oregon. 

Washington. 

Kansas. 

West  Virginia. 

New  York. 

New  Jersey. 

Minnesota. 

Michigan  (biennial  reports). 

Wisconsin    (biennial  reports). 

Illinois. 

Ontario  (Commission  on  Railway  Taxation). 

The  Income  Tax  :     Kinsman. 

The  editor  of  this  summary  states  the  *' significant  features"  of  these 
reports  in  the  following  language : 

SIGNIFICANT  FEATURES. 

A  review  of  the  conclusions  reached  by  the  several  commissions,  as  shown  in  the 
summary,  reveals  the  following  significant  facts : 

(a)  A  general  recognition  of  the  necessity  of  adjusting  tax  systems  to  meet 
changing  conditions. 

(6)  The  general  property  tax  is  denounced  by  a  large  majority  of  the  commis- 
sioners as  primitive,  ineffective,  unadapted  to  present  industrial  conditions,  and 
the  greatest  obstacle  in  the  way  of  revenue  reform. 

(c)  Constitutional  restrictions  on  revenue  methods  in  most  of  the  states  are 
declared  unnecessarily  rigid,  and  harmful ;  efforts  are  being  made  in  many  toward 
amendments. 

(d)  The  separation  of  the  sources  of  state  and  local  revenues  is  generally  favored, 
and  being  widely  adopted. 

/g\      :)c         «         :|c         «         «         * 

if)  A  recognition,  all  but  unanimous,  that  all  kinds  of  property  can  not  be  prop- 
erly taxed  by  the  same  methods ;  that  classification  of  subjects  for  taxation  is  wise 
and  equitable,  and  sanctioned  by  the  highest  courts. 

(g)  An  increasing  tendency  to  apply  railroad  and  other  corporation  taxes  (includ- 
ing those  on  franchise  values),  and  license  fees,  to  state  purposes,  these  being  assessed 
by  state  boards,  leaving  local  assessments  for  county  and  municipal  purposes. 

The  Missouri  commission  of  1906,  of  which  Frederick  N.  Judson,  the 
author  of  the  leading  legal  text-book  on  the  "Law  of  Taxation,"  was 
chairman,  said : 

We  are  all  agreed  that  the  first  step  in  any  tax  reform  is  the  separation  of  the 
sources  of  state  and  local  revenues. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  47 

Professor  Seligman  of  Columbia  University  is  recognized  as  the  lead- 
ing authority  on  taxation  in  this  country.    As  long  ago  as  1895  he  said : 

Slowly,  but  surely,  we  are  moving  toward  a  readjustment  of  the  American  system 
of  taxation.  Its  ultimate  form  can  already  be  faintly  discerned;  separation  of  state 
and  local  revenues;  state  revenues  derived  chiefly  from  corporation  and  inheritance 
taxes ;  local  revenues  derived  from  real  estate  and  from  the  other  elements  of  tax- 
able faculty. 

Thirteen  years  later,  with  the  development  of  that  period  under 
review,  he  said: 

What,  then,  are  the  chief  difficulties  in  our  tax  system  which  are  coming  more 
and  more  to  be  recognized  everywhere  throughout  the  length  and  breadth  of  the 
land.     I  should  sum  them  up  under  eight  hands. 

First  and  foremost  is  the  breakdown  of  the  general  property  tax,  which  is  almost 
everywhere  still  the  chief  reliance  of  state  and  local  government.  The  general  prop- 
erty tax  works  well  only  amid  most  primitive  economic  conditions  for  which  alone 
it  was  calculated.  Almost  everywhere,  for  reasons  which  it  is  unnecessary  here  to 
recapitulate,  and  which  it  is  utterly  impossible  to  prevent,  personalty  is  slipping 
from  under.  The  administration  of  the  general  property  tax  is  everywhere  attended 
with  increasing  difficulty,  and  in  our  large  industrial  centers  it  has  become,  to  use 
the  words  of  a  recent  tax  report,  "a  howling  farce."  Everywhere,  north  and  south, 
east  and  west,  although  in  varying  degree,  comes  the  cry  that  the  attempt  to  enforce 
the  general  property  tax,  whether  by  listing  bills  or  tax  ferrets,  by  oaths  or  by 
inquisitors,  is  doing  much  to  force  upon  the  average  citizen  habits  of  falsehood  and 
corruption. 

Second,  a  growing  lack  of  equality  in  tax  burdens,  not  only  as  between  classes  in 
the  community,  but  as  between  individuals  of  the  same  class.  Where  land,  for 
instance,  is  assessed  at  20  per  cent  of  its  value  in  certain  counties,  and  at  80  per 
cent  or  100  per  cent  in  other  counties,  it  is  obvious  that  the  contribution  to  the 
state  tax  is  grossly  unequal  and  unfair. 

Third,  the  application  to  general  purposes  of  what  was  intended  to  be  only  a  local 
revenue.  All  direct  taxation  was  originally  local  in  character,  and  the  assessment 
of  property  for  local  taxation  was  at  the  outset  a  comparatively  simple  matter. 
When  the  need  for  state  revenues  made  itself  felt,  it  was  obviously  expedient  to  tack 
on  to  this  local  taxation  a  quota  for  general  pi^rposes.  But  with  the  great  develop- 
ment of  state  functions,  and  with  the  breakdown  of  the  local  barriers  of  commerce 
and  industry,  what  was  originally  equal  soon  turned  into  inequality,  and  the  attempt 
to  fetter  interlocal  or  even  interstate  business  conditions  by  the  bonds  of  purely  local 
assessment  has  proved  to  be  a  fruitful  source  of  difficulty. 

Fourth,  the  failure  to  make  modern  corporations  bear  their  fair  share  of  taxation. 
The  corporation  is  a  growth  of  the  last  half  century.  It  was  unknown  when  the 
present  framework  of  our  tax  system  was  established.  The  attempt  to  force  the 
new  wine  into  the  old  bottles  is  not  only  spoiling  the  wine,  but  cracking  the  bottles. 

Fifth,  the  failure  to  secure  adequate  compensation  from  individuals  and  corpora- 
tions alike  for  the  franchises  and  privileges  that  are  granted  by  the  community.  An 
earnest  effort  is  being  made  at  present  throughout  the  length  and  breadth  of  the 
land  to  repair  this  defect.  But  with  the  historic  system  as  it  has  come  down  to  us 
in  this  country  of  estimating  wealth  in  terms  of  property  rather  than,  as  abroad,  in 
terms  of  income,  we  have  been  plunged  into  the  vortex  of  the  assessment  of  fran- 
chises, and  have  thus  been  compelled  to  attack  a  problem  which  does  not  even  exist 
in  other  parts  of  the  world. 

Sixth,  the  undue  burden  cast  upon  the  farmer.  Practically,  this  is  the  problem 
of  taxation  in  many  of  our  rural  districts  and  in  all  agricultural  communities  where 
the  failure  of  an  adequate  revenue  system  and  of  the  readjustment  of  social  resources 
makes  it  impossible  to  secure  good  schools  or  fairly  decent  roads  without  over- 
burdening what  is,  after  all,  the  chief  source  of  American  prosperity. 

Seventh,  the  interference  with-  business,  due  to  the  partial  and  spasmodic  enforce- 
ment of  antiquated  laws.  Witness  the  attempt  in  some  states  suddenly  to  levy  the 
mortgage  tax,  as  recently  in  New  York,  where  the  entire  building  industry  was 
thrown  into  confusion  ;  or  the  attempt  in  other  states  to  enforce  now  this  and  now 
that  kind  of  property  tax  on  businesses  which  led  to  a  change  in  the  location  of  the 
business  rather  than  to  any  increase  of  revenue.     The  harassing  of  the  individual 


48  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

business  or  the  fear  of  harassment  is  becoming  less  and  less  defensible  in  the  deli- 
cately adjusted  mechanism  of  modern  business  society. 

Eighth,  the  failure  to  make  great  wealth  contribute  its  due  share.  In  former 
times,  where  property  was  fairly  equally  distributed  and  conditions  simple,  inequal- 
ities in  tax  burdens  were  slight  and  unperceived.  Before  the  huge  aggregations 
of  modern  wealth,  the  crude  tax  machinery  of  earlier  days  stands  impotent.  And 
yet  we  hug  ourselves  with  the  delusion  that  all  that  is  necessary  is  to  patch  up  the 
old  machinery,  whereas  what  is  really  needed  is  to  throw  the  old  machinery  on  the 
scrap  heap  and  to  utilize  entirely  new  and  modern  instruments  and  processes. 

His  conclusion  was : 

The  separation  of  state  and  local  revenues  is  therefore  a  matter  of  vital  impor- 
tance in  the  American  commonwealths  of  to-day,  not  so  much  because  it  forms  in 
itself  any  solution  of  the  problem,  but  because  it  is  the  indispensable  initial  step 
to  any  substantial  progress.  The  separation  of  state  and  local  revenues  is  not  a 
cure,  but  it  alone  will  make  a  cure  possible.  It  is  from  this  point  of  view  that  we 
must  address  ourselves  to  the  problem. 

The  problems  of  taxation  in  the  United  States  are  becoming  every  year  more 
complex.  In  order  to  solve  them  we  must  keep  in  mind  the  ultimate  goal,  and  be 
prepared  to  take  the  first  step.  The  ultimate  goal  is  the  accommodation  of  fiscal 
methods  to  our  changed  economic  conditions.  The  first  step  is  the  separation  of 
state  and  local  revenues. 

The  International  Tax  Association  is  an  organization  formed  in  1906. 
Its  membership  comprises  all  the  leading  tax  experts  in  the  country, 
including  university  professors  of  taxation,  state  tax  commissioners, 
representatives  of  the  legal  profession  interested  in  taxation,  and 
many  special  students  of  tax  problems.  It  holds  an  annual  conference 
attended  by  delegates  appointed  by  the  governors  of  the  states  and  by 
the  presidents  of  the  leading  universities,  and  by  others  selected  for 
their  knowledge  of  tax  problems. 

At  the  conference  held  at  Columbus,  Ohio,  November  23-24,  1907,  at 
which  thirty- three  states  and  the  District  of  Columbia,  three  provinces 
of  Canada,  and  thirty-two  universities  were  represented,  the  following 
resolutions  were  passed : 

STATE   CONSTITUTIONS. 

WiiEBEAS,  The  greatest  inequalities  have  arisen  from  laws  designed  to  tax  all  the 
widely  different  classes  of  property  in  the  same  way,  and  such  laws  have  been 
ineffective  in  the  production  of  revenue ;  and 

Whereas,  The  appropriate  taxation  of  various  forms  of  property  is  rendered 
impossible  by  the  restrictions  upon  the  taxing  power  contained  in  the  constitutions 
of  many  of  the  states ; 

Resolved,  That  all  state  constitutions  requiring  the  same  taxation  of  all  property, 
or  otherwise  imposing  restraints  upon  the  reasonable  classification  of  property, 
should  be  amended  by  the  repeal  of  such  restrictive  provisions. 

HOME  RULE. 

Whereas,  The  reliance  by  state  governments  for  revenue  upon  the  taxes  ordinarily 
imposed  on  property  as  assessed  by  local  officials  has  produced  sectional  injustice 
and  jealousy  and  local  inequality ;  and 

Whereas,  The  general  property  tax  as  a  source  of  state  revenue  enforces  a  rigid 
uniformity  which  can  take  no  account  of  actual  conditions ;  be  it 

Resolved,  That  the  state  and  local  revenue  systems  should  be  so  far  divorced 
that  by  general  laws  the  appropriate  local  governing  bodies  may,  if  deemed  expedient, 
be  granted  certain  limited  and  carefully  prescribed  powers  over  the  licensing  of  occu- 
pations and  the  selection  of  subjects  of  local  taxation  and  the  rate  of  assessment 
upon  such  subjects. 


REPORT  OP  COMMISSION  ON  REVENUE  AND  TAXATION.  49 

Another  leading  authority,  Professor  Daniels  of  Princeton  Univer- 
sity, says : 

The  remedy  for  the  first  evil  is  not  difficult  to  find.  It  is  the  abolition  of  the 
state  tax  on  real  estate.  The  basis  of  assessment  upon  which  this  tax  is  now 
imposed  is  unfair  as  between  different  sections.  This  basis  of  assessment  is  also 
incapable  of  any  very  material  improvement  through  the  machinery  of  state  boards 
of  equalization.  In  most  of  our  states,  however,  the  entire  abolition  of  common- 
wealth taxation  upon  real  estate  seems  feasible. 

In  another  connection  he  says  of  the  general  property  tax: 
Some  states  have  sought  to  uncover  personal  property  through  the  machinery  of 
oaths,  affidavits,  and  the  like.  The  effectiveness  of  such  laws  is  inconsiderable.  If 
Jove  laughs  at  lovers'  vows,  he  probably  guffaws  at  taxpayers'  oaths.  Even  the 
Psalmist's  hasty  allegation  of  universal  mendacity  needs  little  qualification  in  this 
province  of  finance.  Where  the  taxpayer's  conscience  is  tender  he  finds  (as  one 
has  put  it)  that  virtue  is  perforce  its  own  reward.  This  phase  of  the  system  is 
described  in  one  tax  report  as  "a  tax  upon  ignorance  and  honesty" ;  and  in  another 
report  we  are  told  that  "the  payment  of  the  tax  on  personalty  is  almost  as  volun- 
tary and  is  considered  in  pretty  much  the  same  light  as  donations  to  the  neighbor- 
hood church  or  Sunday-school." 

A  Previous  Califopnia  Report. 

In  1899  a  special  committee  of  the  state  senate  was  appointed  "to  investigate 
the  subject  of  state,  county,  and  municipal  taxation."  The  committee  was  composed 
of  Senator,  now  Congressman  S.  C.  Smith  of  Kern  county,  Senator  E.  K.  Taylor 
of  Alameda  county,  and  Senator  J.  C.  Sims  of  Sonoma  county.  This  committee 
rendered  a  report  in  1901.  It  said:  "From  Maine  to  Texas  and  from  Florida  to 
California  there  is  but  one  opinion  as  to  the  workings  of  the  present  system  of  taxa- 
tion. That  is,  that  it  is  inequitable,  unfair,  and  positively  unjust."  It  recommended 
the  adoption  of  "occupation  taxes,"  or  taxes  on  business  to  supplement  the  property 
tax.     No  action  was  taken  by  the  legislature  in  response  to  this  report. 

The  farmers  are  the  worst  sufferers.  The  master  of  the  State  Grange 
of  Ohio,  in  an  address  before  the  above  mentioned  National  Tax  Asso- 
ciation, said : 

For  two  generations  the  farmers  of  the  United  States  have  in  large  majority 
cherished  the  belief  that  a  uniform  rate  upon  all  property  at  its  true  value  in  money 
was  the  highest  conception  of  fairness  and  justice  between  man  and  man.  It  sounds 
fair,  but  experience  and  all  history  prove  that  its  fairness  begins  and  ends  in  sound. 
For  it  to  be  entirely  fair,  one  must  go  back  to  a  period  when  all  property  was  visible 
and  equally  productive.  So  soon  as  property  became  diversified,  yielding  different 
incomes,  giving  rise  to  intangible  property,  the  general  property  tax  became  unsound 
from  an  economic  standpoint  and  unjust  as  between  individuals.  When  this  system 
of  taxation  was  embedded  in  the  constitution  of  Ohio  and  the  older  states,  it  had  less 
to  condemp  it,  as  the  proportion  of  visible  property  was  much  greater.  It  was  not  a 
correct  principle,  however,  then,  and  it  is  entirely  false  now. 

The  farmer  more  nearly  than  any  class  of  taxpayers  has  his  property  invested  in 
things  visible,  in  stock,  herds,  implements,  land  and  improvements. 

The  farmers  of  our  own  state  have  spoken  in  no  uncertain  tones. 

The  State  Grange,  after  many  years  of  discussion,  appointed  a  permanent  com- 
mittee on  taxation  in  1903.  This  committee  has  rendered  several  reports  advocating 
the  general  line  of  reform  embodied  in  the  amendment.  At  the  annual  meeting  held 
at  San  Jose,  October,  1907,  the  following  resolutions  were  passed : 

''Resolved  hy  the  Utate  Grange,  P.  of  H.  of  California,  That  we,  after  a  careful 
consideration  of  the  same  by  our  C5ommittee  on  Taxation  and  by  this  State  Grange, 
hereby  express  our  approval  of  the  proposed  revenue  law,  and  of  the  proposed  con- 
stitutional amendment,  essential  to  its  enactment ;  and  we  recommend  the  approval 
thereof  by  the  people  of  this  state  and  the  further  necessary  enactment  into  our 
state  and  county  revenue  system  of  it  by  the  legislature  at  its  next  session. 

''Resolved,  The  Executive  Committee  of  this  State  Grange,  P.  of  H.,  send  a  copy 

4 — RT 


50  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

of  this  report  and  resolutions  to  Governor  Gillett  and  request  him,  on  behalf  of  the 
Patrons  of  Husbandry,  the  agriculturalists  and  the  land  owners  of  California,  to 
give  his  approval  and  support  to  the  adoption  of  the  proposed  revenue  system  for 
this  state." 

In  the  course  of  the  discussion  of  the  amendment  voted  on  in  1908 
the  city  assessor  of  Los  Angeles  county  sneered  at  the  tax  reform  plan 
''as  fine  for  the  cow  counties."  The  Pacific  Rural  Press  took  up  the 
challenge  and,  while  lamenting  the  interjection  of  a  class  issue  into  the 
discussion  of  a  problem  that  should  be  considered  solely  from  the  point 
of  view  of  justice  to  all,  said: 

We  rather  regret  this  appeal  to  fanners  as  a  class  to  do  what  is  industrially 
good  for  them,  because  enlightened  farmers  are  the  last  of  all  people  to  make  class 
issues.  They  may  be  charged  with  them  on  the  basis  of  some  things  which  are 
being  done  now  and  then  in  the  name  of  agriculture,  but  when  you  come  to  consider 
them  as  a  whole,  farmers  are  the  first  of  all  the  nation  to  forget  class  claims  and 
to  merge  their  own  interests  in  patriotism,  philanthropy  and  humanitarianism. 
*  *  *  We  are  rather  ashamed  then  to  appeal  to  farmers  to  support  a  measure 
upon  the  ground  that  it  is  good  for  them  as  a  class,  because  of  the  danger  of  weaken- 
ing it  in  their  regard.  But  what  else  can  we  do  when  the  effort  is  boldly  made  to 
prejudice  the  measure  and  win  urban  negatives  by  branding  it  as  a  selfish  rural 
issue?  What  else  can  we  do  when,  as  currently  reported,  the  city  assessor  of  Los 
Angeles  denounces  the  amendment  because  it  is  "fine  for  the  cow  counties."  Fine 
for  the  cow  counties,  indeed ;  fine  for  the  orange  counties  and  the  lemon  counties 
and  walnut  counties,  also,  no  doubt.  And  this  shortsighted  ofiicial  forgot,  of 
course,  how  much  rural  property  is  owned  by  the  residents  of  Los  Angeles,  and  how 
they  have  been  unjustly  taxed  for  it. 

This  issue,  then,  of  the  rural  benefij:s  of  the  amendment  is  not  of  our  making, 
but  we  are  righteously  inflamed  by  it,  as  other  ruralists  should  be.  Where  would 
any  great  city  in  California  be  but  for  its  environment  of  agricultural  property? 
Who  would  have  carried  millions  into  Los  Angeles  if  the  citrus  lands  of  its  own 
county  and  of  adjacent  counties,  if  the  orange  had  not  stood  forth  as  the  exponent 
of  health  and  gold  in  southern  California,  or  if  the  oil  had  not  flowed  from  wells 
in  rural  fields  and  canyons?  If,  however,  some  city  men  are  to  impeach  this  amend- 
ment and  secure  urban  votes  against  it  by  the  reflection  that  it  is  a  class  measure,- 
we  must  fight  the  issue  with  the  same  fire  in  the  veins  of  the  rural  population.  Let 
our  farmers  understand,  then,  clearly  that  it  is  good  for  farm  property.  The  Com- 
mission on  Revenue  and  Taxation  shows  clearly  by  its  recent  publications  that  the 
reform  would  have  reduced  the  state  tax  this  year  on  rural  properties  over  18  cents 
per  $100  assessed  valuation — that  is,  under  the  amendment,  ownei*s  of  rural  property 
would  pay  22  cents  instead  of  40  cents,  as  they  will  this  year.  But  the  state  tax 
this  year  is  the  lowest  but  one  in  the  whole  history  of  the  state.  For  the  last  ten 
years  it  has  averaged  49 1/^  cents,  and  the  reduction  from  such  a  tax  would  be  nearly 
28  cents.  Surely  it  is  "fine  for  the  cow  counties."  We  accept  it  that  way,  if  the 
issue  is  made  on  that  ground. 

*******  * 

Now,  why  does  it  come  out  that  way?  It  does  not  mean,  of  course,  that  the  state 
will  have  less  money  to  support  its  desirable  and  progressive  institutions.  The 
farmer  would  not  for  a  moment  accept  a  measure  which  would  injure  the  name  of 
his  state  nor  make  it  an  inferior  home  for  his  children,  nor  would  a  statesmanlike 
commission  think  of  such  a  proposition.  There  will  be  no  less  money  for  public 
purposes,  but  the  farmer  will  only  pay  his  just  share  toward  such  purposes.  Here, 
again,  perhaps  we  can  claim  that  the  issue  is  a  rural  one,  because  it  has  long  been 
a  rural  conviction  and  complaint  that  property  not  so  easily  seen  and  measured  as 
the  farmers'  acres,  improvements  and  live  stock  was  escaping  its  share  of  public 
burdens ;  that  people  who  were  pulling  down  fine  plums  of  fortune  were  paying 
relatively  less  taxes  than  he,  and  that  if  all  productive  property  paid  its  share,  his 
share  would  be  less.  He  has  always  believed  that  great  corporations  largely  escaped 
taxation,  that  very  profitable  franchises  escaped,  that  millions  of  productive  capital 
rolled  out  of  sight  on  the  ides  of  March.     And  so  indeed  it  was,  and  is. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  51 

Conclusion. 

In  the  event  of  the  adoption  of  the  amendment  by  the  people  in  the 
coming  election,  it  devolves  upon  the  legislature  to  pass  the  laws  neces- 
sary to  put  the  new  system  into  effect.  Not  the  least  part  of  the  labors 
of  this  commission  as  directed  by  law  has  been  the  preparation  of  a 
draft  of  the  laws  necessary  to  that  end.  We  have  been  engaged  upon 
this  steadily  since  June,  1907,  or  a  period  of  over  two  years.  We  have 
examined  the  statutes  of  other  states  bearing  upon  a  similar  method  of 
taxation.  We  have  read  all  the  court  decisions  upon  these  laws.  We 
have  in  gathering  data  become  familiar  with  every  difficulty  that  will 
confront  the  assessing  boards  or  officials  in  the  administration  of  the 
new  tax  system.  We  have  succeeded  in  outlining  in  the  law  the  methods 
by  which  each  of  these  difficulties  can  be  met.  These  laws  will  be  ready 
for  submission  to  the  legislature  when  it  convenes  next  January. 


COUNTY  TABLES. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  55 


SECTION  YI. 

COUNTY  TABLES. 


ALAMEDA  COUNTY. 

Tax  rate:  Inside,  $1.16;  outside,  $1.56. 

Total  assessment  roll  $210,512,357  00 

Deduct  assessment  of: 

Railroads,  street  railways,  and  car  companies.-  $11,625,819  00 

Express  companies   20,400  00 

Telegraph  and  telephone  companies 1,908,488  00 

Light,  heat,  and  power  companies 1,864,150  00 

Banks  and  insurance  companies 1,440,900  00 

Franchises  other  than  of  above 10,200  00 

16,869,957  00 

Balance  subject  to  county  and  municipal  taxation $193,642,400  00 

State  tax  on  $193,642,400  at  $.364 $7(M,858  34 

Deduct   county   and   special   taxes   on   $16,869,957,    being   property 

withdrawn  from  county  taxation 151,154  81 

Net  gain  to  taxpayers  in  county $553,703  53 

Note, — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909  could  have  been  raised  with  a  total  tax  rate 
28.6  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 


ALPINE  COUNTY. 

Tax  rate,   1909:  $2.25. 
Total  assessment  roll $513,444  00 

Deduct  assessment  of: 

Railroads,  street  railways,  and  car  companies..  $39,485  00 

Express  companies * 

Telegraph  and  telephone  companies 500  00 

Banks  and  insurance  companies * 

Light,  heat,  and  power  companies 98,560  00 

Franchises  other  than  of  above ....  * 


138,545  00 


Balance  subject  to  county  and  municipal  taxation.. $374,899  00 


County   and  special   taxes  on  $138,545,  being  property  withdrawn 

from  county  taxation ___  $2,612  96 

Deduct  state  tax  on  $374,899  at  $,364 1,364  63 


Net  loss  to  taxpayers  of  county $1,248  33 

•None  assessed. 


56  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


AMADOR   COUNTY. 

Tax  rate,  1909:   Inside,  $1.52;  outside,  $2.00. 

Total  assessment  roll $5,545,591  00 

Deduct  assesment  of: 

Railroads,  street  railways,  and  car  companies.-        $194,160  00 

Express  companies * 

Telegraph  and  telephone  companies 11,400  00 

Light,  heat,  and  power  companies 502,155  00 

Banks  and  insurance  companies 26,600  00 

Franchises  other  than  of  above * 

734,315  00 

Balance  subject  to  county  and  municipal  taxation $4,811,276  00 

State  tax  saved  on  $4,811,276  at  $.364 $17,513  04 

Deduct  county  and  special  taxes  on  $734,315,  being  property  with- 
drawn from  county  taxation 9,022  57 

Net  gain  to  taxpayers  in  county $8,490  47 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
17.6  cents  per  hundred  dollars  lower  than  the  total  rate  of  that  year. 


BUTTE  COUNTY. 

Tax  rate,  1909:   Inside,  $1.65;  outside,  $2.05. 

Total  assessment  roll $21,891,419  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $2,474,409  00 

Express  companies  1,350  00 

Telegraph  and  telephone  companies 42,070  00 

Light,  heat,  and  power  companies 1,425,160  00 

Banks  and  insurance  companies 206,837  00 

Franchises  other  than  above 500  00 

4,150,326  00 

Balance  subject  to  county  and  municipal  taxation $17,741,093  00 

County  and  special  taxes  on  $4,150,326,  being  property  withdrawn 

from  county  taxation $73,522  92 

Deduct  state  tax  saved  on  $17,741,093  at  $.364 64,577  58 

Net  loss  to  taxpayers  in  county $8,945  34 

Net  loss  in  terms  of  tax  rate,  5.04  cents. 

Note. — In  1905  and  in  1908  Butte  county  would  have  been  a  large  gainer  under  the 
amendment,  gaining  $42,271.26,  or  a  lower  tax  rate  of  28  cents  in  1905,  and  $24,813.81, 
or  a  lower  tax  rate  of  14  cents  in  1908. 

In  1909  the  assessed  value  of  property  other  than  that  of  public  service  corpora- 
tions, was  decreased  and  that  of  public  service  corporations  was  increased,  while  the 
rate  for  county  purposes  was  raised  the  whole  amount  of  the  reduction  in  the  state 
tax.  The  result  is  a  small  loss  in  1909.  Considering  the  low  valuation,  Butte  county 
can  easily  raise  the  same  amount  of  money  as  before  with  a  tax  rate  much  lower  than 
most  other  counties,  and  that  on  a  very  low  assessed  value. 

♦None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  57 

CALAVERAS  COUNTY. 

Tax  rate,  1909:  $2.15. 

Total  assessment  roll  $G,463,321  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies. _  $694,197  00 

Express  companies   400  00 

Telegraph  and  telephone  companies 12,620  00 

Light,  heat,  and  power  companies 213,360  00 

Banks  and  insurance  companies 15,500  00 

Franchises  other  than  of  above * 

936,077  00 

Balance  subject  to  county  and  municipal  taxation $5,527,244  00 

State  tax  saved  on  $5,527,244  at  $.364 $20,119  16 

Deduct  county  and  special  taxes  on  $926,077,  being  property  with- 
drawn from  county  taxation 10.453  10 

Net  gain  to  taxpayers  in  county $9,666  06 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
35.5  cents  per  one  hundred  dollars  lower  than  the"  total  rate  of  that  year. 

COLUSA  COUNTY. 
Tax  rate,  1909:   Inside,  $1.20;  outside,  $1.60. 

Total  assessment  roll $12,992,538  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies.-        $873,176  00 

Express  companies * 

Telegraph  and  telephone  companies 31,388  00 

Light,  heat,  and  power  companies 15,680  00 

Banks  and  insurance  companies 111,971  00 

Franchises  other  than  of  above * 

1,032,215  00 

Balance  subject  to  county  and  municipal  taxation $11,960,323  00 

State  tax  saved  on  $11,960,323  at  $.364... $43,535  57 

Deduct  county  and  special  taxes  on  $1,032,215,  being  property  with- 
drawn from  county  taxation 14,879  28 

Net  gain  to  taxpayers  in  county $28,656  29 

Note. — Under  the  amendment,  there,  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909  could  have  been  raised  with  a  total  tax  rate 
23.9  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 

CONTRA  COSTA  COUNTY. 
Tax  rate,  1909:   Inside,  $1.10;  outside,  $1.50. 

Total  assessment  roll . $32,472,408  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $3,980,668-  00 

Express  companies * 

Telegraph  and  telephone  companies 175,785  00 

Light,  heat,  and  power  companies 192,000  00 

Banks  and  insurance  companies 91,447  00 

Franchises  other  than  of  above 83,725  00 

4,524,525  00 

Balance  subject  to  county  and  municipal  taxation ._     $27,947,883  00 

State  tax  saved  on  $27,947,883  at  $.364 $101,730  29 

Deduct  county  and  special  taxes  on  $4,524,525,  being  property  with- 
drawn from  county  taxation 61,288  42 

Net  gain  to  taxpayers  in  county $40,441  87 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
14.4  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 

♦None  assessed. 


58  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

DEL  NORTE  COUNTY. 
Tax  rate,  1909:   Inside,  $1.25;  outside,  $1.50. 

Total  assessment  roll  $3,957,135  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies.  __  "] 

Express   companies   j 

Light,  heat,  and  power  companies j>         $2,153  00 

Telegraph  and  telephone  companies | 

Franchises  other  than  of  above J 

^>153  00 

Balance  subject  to  county  and  municipal  taxation $3,954,982  00 

State  tax  saved  on  $3,954,982  at  $.364 $14,396  13 

County  and  special  taxes  on  $2,153,  being  property  withdrawn  from 

county  taxation  27  68 

Net  gain  to  taxpayers  in  county $14,368  45 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
36.3  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

EL  DORADO  COUNTY. 
Tax  rate,  1909:    Inside,  $1.60;  outside,  $2.00. 

Total  assessment  roll  $5,758,516  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies.  _        $727,512  00 

Express  companies 175  00 

Telegraph  and  telephone  companies 10,060  00 

Light,  heat,  and  power  companies 82,545  00 

Banks  and  insurance  companies 11,850  00 

Franchises  other  than  of  above * 

832,142  00 

Balance  subject  to  county  and  municipal  taxation $4,926,374  00 

State  tax  saved  on  $4,926,374  at  $.364 $17,932  00 

County  and  special  taxes  on  $832,142,  being  property  withdrawn 

from  county  taxation 13,613  84 

Net  gain  to  taxpayers  in  county $4,318  16 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
8.7  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

FRESNO  COUNTY. 
Tax  rate,  1909:   Inside,  $1.18;  outside,  $1.56. 

Total   assessment  roll $63,809,821  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies.  __     $8,740,935  00 

Express  companies   4,770  00 

Telegraph  and  telephone  companies 189,331  00 

Light,  heat,  and  power  companies 230,443  00 

Banks  and  insurance  companies 67,682  00 

Franchises  other  than  above 91,825  00 

9,324,986  00 

Balance  subject  to  county  and  municipal  taxation $54,484,835  00 

State  tax  saved  on  $54,484,835  at  $.364 $198,324  80 

Deduct  county  and  special  taxes  on  $9,324,986,  being  property  with- 
drawn from  county   taxation 133,793  90 

Net  gain  to  taxpayers  in  county $64,530  90 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
10.8  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

*None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  59 

GLENN  COUNTY. 
Tax  rate,  1909:   Inside,  $1.95;  outside,  $2.35. 

Total   assessment  roll $12,668,965  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies..     $1,410,990  00 

Express  companies ♦ 

Telegraph  and  telephone  companies 31,810  00 

Lijfht,  heat,  and  power  companies 49,980  00 

Banks  and  insurance  companies 67,495  00 

Franchises  other  than  of  above .__  4,500  00 

1,564.775  00 

Balance  subject  to  county  and  municipal  taxation $11,104,190  00 

State  tax  saved  on  $11,104,190  at  $.364 $40,419  25 

Deduct  county  and  special  taxes  on  $1,564,775,  being  property  with- 
drawn from  county  taxation 32,520  71 

Net  gain  to  taxpayers  in  county $7,898  54 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
7.1  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 

HUMBOLDT    COUNTY. 

Tax  rate,  1909:   Inside,  $1.40;  outside,  $2.00. 

Total  assessment  roll $29,350,436  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $1,141,215  00 

Express  companies   360  00 

Telegraph  and  telephone  companies 104,788  00 

Light  heat,  and  power  companies 158.860  00 

Banks  and  insurance  companies 422,372  00 

Franchises  other  than  of  above 2,600  00 

1,830,195  00 

Balance  subject  to  county  and  municipal  taxation $27,520,241  00 


State  tax  on  $27,520,241  at  $.364 $100,173  67 

Deduct  county  and  special  taxes  on  $1,830,195,  being  property  with- 
drawn from  county  taxation 28,402  90 

Net  gain  to  taxpayers  in  county $71,770  77 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
26.07  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 

liVIPERIAL   COUNTY. 

Tax  rate,  1909:   Inside,  $1.75;  outside,  $2.15. 
Total  assessment  roll i $9,521,584  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $3,343,764  00 

Express  companies  * 

Telegraph  and  telephone  companies 24,231  00 

Light,  heat,  and  power  companies 97,430  00 

Banks  and  insurance  companies 18,725  00 

Franchise  other  than  of  above 25,000  00 

3,509,150  00 

Balance  subject  to  county  and  municipal  taxation $6,012,434  00 

County  and  special  taxes  on  $3,509,150,  being  property  withdrawn 

from    county    taxation $89,494  47 

Deduct  state  tax  on  $6,012,434  at  $.364 . 21,885  25 

Net  loss  to  taxpayers  of  county $67,609  22 

Note. — This  is  a  new  county  and  the  conditions  are  very  abnormal.  The  growth 
of  property  values  in  this  new  county  is  so  rapid  that  the  apparent  loss  will  soon  dis- 
appear. In  1908  the  assessed  valuation  was  $5,481,341,  not  including  railroads 
assessed  by  the  state  board  of  equalization.  In  1909  it  was  $7,168,146,  and  in  1910, 
$9,615,066,  or  an  increase  of  over  $4,000,000  in  three  years. 

♦None  assessed. 


60  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

INYO  COUNTY. 

Tax  rate,  1909:   Inside,  $2.00;  outside,  $2.30. 

Total  assessment  roll $4,485,895  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies.  _        $485,200  00 

Express  companies  * 

Telegraph  and  telephone  companies 8,300  00 

Light,  heat,  and  power  companies 201,000  00 

Banks  and  insurance  companies 54,000  00 

Franchises  other  than  of  above * 

748,500  00 

Balance  subject  to  county  and  municipal  taxation $3,737,395  00 

State  tax  saved  on  $3,737,395  at  $.364 $13,604  12 

Deduct  county  and  special  taxes  on  $748,500,  being  property  with- 
drawn from  county  taxation 6,650  35 

Net  gain  to  taxpayers  in  county $6,953  77 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
18.6  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 

KERN  COUNTY. 

Tax  rate,  1909:   Inside,  $1.05;  outside,  $1.35. 

Total  assessment  roll $44,184,162  00 

Deduct  assessment  of: 

Railroads,  street  railway,  and  car  companies.  _     $8,191,098  00 

Express  companies   2,394  00 

Telegraph  and  telephone  companies 180,642  00 

Light,  heat,  and  power  companies 2,754,830  00 

Banks  and  insurance  companies 55.426  00 

Franchises  other  than  of  above 31,200  00 

11.215,590  00 

Balance  subject  to  county  and  municipal  taxation $32,968,572  00 

State  tax  saved  on  $32,968,572  at  $.364 $120,005  60 

Deduct  county  and  special  taxes  on  $11,215,590,  being  property  with- 
drawn from  county  taxation 117,667  11 

Net  gain  to  taxpayers  in  county $2,338  49 

Note. — ^Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
.70  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

KINGS  COUNTY. 
Tax  rate,  1909:  Inside,  $1.15;  outside,  $1.55. 

Total  assessment  roll $13,074,910  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies..     $1,927,316  00 

Express  companies   * 

Telegraph  and  telephone  companies 41,074  00 

Light,  heat,  and  power  companies 61,068  00 

Banks  and  insurance  companies 32,925  00 

Franchises  other  than  of  above 6,078  00 

2,068,461  00 

Balance  subject  to  county  and  municipal  taxation $11,006,449  00 

State  tax  saved  on  $11,006,449  at  $.364 $40,063  47 

Deduct  county  and  special  taxes  on  $2,068,461,  being  property  with- 
drawn from  county  taxation 30,842  80 

Net  gain  to  taxpayers  in  county $9,220  67 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
8.3  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 

♦None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.     ^^J,    61 

LAKE  COUNTY. 
Tax  rate,  1909:   Inside,  $1.80;  outside,  $2.20. 

Total  assessment  roll $3,624,990  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies. __  .$650  00 

Express  companies  * 

Telegraph  and  telephone  companies 2,095  00 

Light,  heat,  and  power  companies 15,725  00 

Banks  and  insurance  companies 1,090  00 

Franchises  other  than  of  above 700  00 

20,260  00 

Balance  subject  to  county  and  municipal  taxation $3,604,730  00 

State  tax  saved  on  $3,604,730  at  $.364 $13,121  21 

Deduct  county  and  special  taxes  on  $20,260,  being  property  with- 
drawn from  county  taxation 432  41 

Net  gain  to  taxpayers  in  county $12,688  80 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
35.2  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

LASSEN    COUNTY. 

Tax  rate,  1909:   Inside,  $1.20;  outside,  $1.80. 
Total  assessment  roll $6,437,333  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies. .        $521,192  00 

Express  companies  * 

Telegraph  and  telephone  companies 2,250  00 

Light,  heat,  and  power  companies 16,800  00 

Banks  and  insurance  companies 7,110  00 

Franchises  other  than  of  above * 

.  547,352  00 

Balance  subject  to  county  and  municipal  taxation $5,889,981  00 


State  tax  saved  on  $5,889,981  at  $.364 $21,439  53 

Deduct  county  and  special  taxes  on  $547,352,  being  property  with- 
drawn from  county  taxation 7,859  98 

Net  gain  to  taxpayers  in  county $13,579  55 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
23  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

LOS  ANGELES   COUISITY. 

Tax  rate,  1909:   Inside,  $0.90;  outside,  $1.45. 

Total  assessment  roll $593,879,367  00 

Deduct  assessment  of  :  ^ 

Railroad,  street  railway,  and  car  companies.. _  $49,581,029  00 

Express  companies   * 

Telegraph  and  telephone  companies 7,694,531  00 

Light,  heat,  and  power  companies 21,796,262  00 

Banks  and  insurance  companies 1,688,447  00 

Franchises  other  than  of  above 13,713,101  00 

94,473,370  00 

Balance  subject  to  county  and  municipal  taxation $499,405,997  00 

State  tax  saved  on  $499,405,997.  at  $.364 1 .$1,817,837  00 

Deduct  county  and  special  taxes  on  $94,473,370,  being  property  with- 
drawn from  county  taxation 816.652  00 

Net  gain  to  taxpayers  in  county $1,001,185  00 

Note. — Under  the  amendment,  there  being  no  state  tax.  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
20.04  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

♦None  assessed. 


62  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

MADERA   COUNTY. 

Tax   rate:    Inside,  $1.80;   outside,  $2.20. 
Total  assessment  roll $9,632,927  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $2,091,590  00 

Express  companies   215  00 

Telegraph  and   telephone   companies 26,820  00 

Light,  heat,  and  power  companies 97,585  00 

Banks  and  insurance  companies 29,685  00 

Franchises  other  than  of  above 2,000  00 

2,247,895  00 

Balance  subject  to  county  and  municipal  taxation $7,385,032  00 

County  and  special  taxes  on  $2,247,895,  being  property  withdrawn  ~ 

from  county  taxation _ $43,519  65 

Deduct  state  tax  on  $7,385,032  at  $.364 26,881  51 

Net  loss  to  taxpayers  of  county. $16,638  14 

Net  loss  in  terms  of  tax  rate,  22.5  cents. 

Note. — In  1905  Madera  county  would  have  gained  $4,890,  or  could  have  raised  the 
same  amount  of  money  with  a  tax  rate  8  cents  lower  than  she  had  in  that  year.  In 
1908  she  would  have  lost  $5,161.67,  or  had  to  raise  her  tax  rate  8  cents  to  raise  the 
same  amount  of  money.  The  apparent  increase  in  the  loss  is  due  mainly  to  the  low 
state  tax  rate,  but  more  to  the  fact  that  Madera  county's  assessed  valuation  is  not 
advancing  as  fast  as  the  assessed  value  of  the  public  service  corporations.  A  moder- 
ate raise  in  the  assessed  valuations  would  turn  this  apparent  loss  into  a  gain. 

MARIN  COUNTY. 

Tax  rate,  1909:  Inside,  $1.16;  outside,  $1.55. 
Total   assessment  roll $19,353,481  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $2,135,382  00 

Express  companies   __.. 2,825  00 

Telegraph  and  telephone  companies 51,810  00 

Light,  heat,  and  power  companies 102,980  00 

Banks  and  insurance  companies 37,785  00 

Franchises  other  than  of  above * 

2,330,782  00 

Balance  subject  to  county  and  municipal  taxation $17,022,699  00 

State  tax  saved  on  $17,022,699  at  $.364 $61,962  62 

Deduct  county  and  special  taxes  on  $2,330,782,  being  property  with- 
drawn from  county  taxation 30,402  18 

Net  gain  to  taxpayers  in  county $31,560  44 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
18.5  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

MARIPOSA  COUNTY. 

Tax  rate,  1909:  Inside,  $2.50  (one  rate  only). 
Total   assessment   roll . $2,462,315  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _  $87,955  00 

Express  companies   * 

Telegraph  and  telephone  companies 4,020  00 

Light,  heat,  and  power  companies * 

Banks  and  insurance  companies * 

Franchises  other  than  of  above * 

91,975  00 

Balance  subject  to  county  and  municipal  taxation $2,370,340  00 

State  tax  saved  on  $2,370,340  at  $.364 $8,628  04 

Deduct  county  and  special  taxes  on  $91,975,  being  property  with- 
drawn from  county  taxation 1.964  58 

Net  gain  to  taxpayers  in  county $6,663  46 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
28.1  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

'      *None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  63 

MENDOCINO  COUNTY. 

Tax  rate,  1909:   Inside,  $1.27;  outside,  $1.57. 

Total   assessment  roll _     $15,536,157  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies..     $1,301,354  00 

Express  companies   * 

Telegraph  and  telephone  companies 34,171  00 

Light,  heat,  and  power  companies 66,300  00 

Banks  and  insurance  companies 58,251  00 

Franchises  other  than  of  above * 

1,460,076  00 

Balance  subject  to  county  and  municipal  taxation. $14,076,081  00 

State  tax  saved  on  $14,076,081  at  $.364 ^ _  $51,236  93 

Deduct  county  and  special  taxes  on  $1,460,076,  being  property  with- 
drawn from  county  taxation 23,293  62 

■»  — 

Net  gain  to  taxpayers  in  county $27,943  31 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
19.8  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

MERCED   COUNTY. 

Tax  rate:    Inside,  $1.45;  outside,  $2.00. 

Total  assessment  roll $19,686,439  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies..     $3,534,110  00 

Express   companies   210  00 

Telegraph  and  telephone  companies 38,690  00 

Light,  heat,  and  power  companies 46,962  00 

Banks  and  insurance  companies 69,058  00 

Franchises  other  than  of  above 22,314  00 

3,711,344  00 

Balance  subject  to  county  and  municipal  taxation $15,975,095  00 

County  and  special  taxes  on  $3,711,344,  being  property  withdrawn 

from  county  taxation $64,945  93 

Deduct  state  tax  on  $15,975,095  at  $.364 58,149  34 

Net  loss  to  taxpayers  of  county $6,796  59 

Net  loss  in  terms  of  tax  rate,  4.2  cents. 

Note. — In  1905  Merced  county  would  have  gained  $31,037.98,  or  could  have  raised 
the  same  amount  of  money  with  a  tax  rate  24  cents  lower  than  she  had  in  that  year. 
In  1908  she  would  have  saved  $6,102.90,  or  had  a  tax  rate  lower  by  1%  cents.  That 
this  is  turned  into  a  loss  in  1909  is  explained  by  the  increase  in  railroad  assessments 
from  $1,952,091  in  1905  to  $3,432,408  in  1909.  The  tax  rate  in  Merced  is  low  com- 
pared with  many  other  counties.  With  a  normal  state  tax  rate  of  50  cents  there 
would  be  a  large  gain.  A  ten  per  cent  raise  in  the  assessed  valuation  would  turn  the 
loss  into  a  gain. 

MODOC  COUNTY. 

Tax  rate,  1909:   Inside,  $1.40;  outside,  $1.70. 

Total  assessment  roll $5,722,092  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies...        $119,728  00 

Express  companies   * 

Telegraph  and  telephone  companies * 

Light,  heat,  and  power  companies 9,500  00 

Banks  and  insurance  companies 14,150  00 

Franchises  other  than  of  above * 

143,378  00 

Balance  subject  to  county  and  municipal  taxation $5,578,714  00 

State  tax  saved  on  $5,578,714  at  $.364 $20,306  52 

Deduct  county  and  special  taxes  on  $143,378,  being  property  with- 
drawn from  county  taxation 2.252  53 

Net  gain  to  taxpayers  in  county $18,053  99 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
32.4  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 


64  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

MONO  COUNTY. 

Tax  rate,  1909:  $2.00  (one  rate  only). 

Total   assessmeut  roll $1,315,700  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies.  __  $62,015  00 

Express  companies  * 

Telegraph  and  telephone  companies * 

Light,  heat,  and  power  companies 2,790  00 

Banks  and  insurance  companies 3,500  00 

Franchises  other  than  of  above * 

G8,305  00 

Balance  subject  to  county  and  municipal  taxation $1,247,395  00 

State  tax  saved  on  $1,247,395  at  $.364 $4,540  51 

Deduct  county  and  special  taxes  on  $68,305,  being  property  with- 
drawn from  county  taxation 1,343  20 

Net  gain  to  taxpayers  in  county $3,197  31 

Note. — ^Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
25.6  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

MONTEREY  COUNTY. 
Tax  rate,  1909:   Inside,  $1.30;  outside,  $1.80. 

Total  assessment  roll $28,261,983  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $3,537,730  00 

Express  companies   360  00 

Telegraph  and  telephone  companies 92,982  00 

Light,  heat,  and  power  companies 211,746  00 

Banks  and  insurance  companies 134,795  00 

Franchises  other  than  of  above * 

3,977,613  00 

Balance  subject  to  county  and  municipal  taxation $24,284,370  00 

State  tax  saved  on  $24,284,370  at  $.364 $88,395  10 

Deduct  county  and  special  taxes  on  $3,977,613,  being  property  with- 
drawn from  county  taxation . 58,200  40 

Net  gain  to  taxpayers  in  county $30,194  70 

Note. — Under  tlie  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
12.4  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

NAPA  COUNTY. 
Tax  rate,  1909:   Inside,  $1.38;  outside,  $1.74. 

Total    assessment   roll $16,288,008.00 

Deduct  assessment  of : 

Railroads,  street  railway,  and  car  companies..     $1,686,468  00 

Express  companies   725  00 

Telegraph  and   telephone   companies 32,980  00 

Light,  heat,  and  power  companies 77,420  00 

Banks  and  insurance  companies 329,189  00 

Franchises  other  than  of  above ],000  00 

2,127,782  00 

Balance  subject  to  county  and  municipal  taxation $14,160,226  00 

State  tax  saved  on  $14,160,226  at  $.364 $51,543  22 

Deduct  county  and  special  taxes  on  $2,127,782,  being  property  with- 
drawn from  county  taxation 31,809  03 

Net  gain  to  taxpayers  in  county . $19,734  19 

Note, — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
13.8  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

♦None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  65 


NEVADA   COUNTY. 
Tax  rate,  1909:   Inside,  $2.00;  outside,  $2.50. 

Total  assessment  roll $8,107,679  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. -     $1,^3,329  00 

Express  companies   575  00 

Telegraph  and  telephone  companies 49,270  00 

Light,  heat,  and  i)ower  companies 225,745  00 

Banks  and  insurance  companies 49,170  00 

Franchises  other  than  of  above 3,000  00 

1,671,089  00 

Balance  subject  to  county  and  municipal  taxation $6,436,590  00 

County  and  special  taxes  on  $1,671,089,  being  property  withdrawn 

from  county  taxation $37,468  76 

Deduct  state  tax  saved  on  $6,436,590  at  $.364 23,429  18 

Net  loss  to  taxpayers  in  county i $14,039  58 

Net  loss  in  terms  of  tax  rate,  21.8  cents. 

Note. — In  1905  Nevada  county  would  have  gained  $6,351.99,  or  could  have  raised 
the  same  amount  of  money  with  a  tax  rate  10.13  cents  lower  than  she  had  in  that  year. 
This  was  turned  into  a  loss  by  the  increase  of  railroad  valuations  by  the  state  board. 
The  assessed  valuation  of  all  other  property  has  increased  only  $260,000,  all  of  which 
is  represented  by  the  assessment  on  public  service  corporations  other  than  the  rail- 
roads. In  other  words,  the  assessed  value  of  property  in  Nevada  county  other  than 
that  of  public  service  corporations  has  not  been  increased  in  four  years.  An  increase 
of  25  per  cent  in  the  assessed  valuations  would  change  this  loss  into  a  gain. 


ORANGE   COUNTY. 
Tax  rate,  1909:   inside,  $0.90;  outside,  $1.20. 

Total  assessment  roll  ___. • -—     $31,936,637  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies..     $3,647,613  00 

Express  companies  465  00 

Telegraph  and  telephone  companies 142,693  00 

Light,  heat,  and  power  companies ^___  167,805  00 

Banks  and  insurance  companies 174,950  00 

Franchises  other  than  of  above 2,850  00 

4,136,376  00 

Balance  subject  to  county  and  municipal  taxation $27,800,261  00 

State  tax  saved  on  $27,800,261  at  $.364 $101,192  95 

Deduct  county  and  special  taxes  on  $4,136,376,  being  property  with- 
drawn from  county  taxation 50,181  39 

Net  gain  to  taxpayers  in  county $51,011  56 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
18.3  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

♦None  assessed. 


O — RT 


66  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


PLACER    COUNTY. 

Tax  rate,  1909:  Inside,  $1,475;  outside,  $1,875. 

Total  assessment  roll . ____     $12,757,392  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies.  _     $4,434,312  00 

Express  companies  2,795  00 

Telegraph  and  telephone  companies 46,880  00 

Light,  heat,  and  power  companies 91,955  00 

Banks  and  insurance  companies 53,475  00 

Franchises  other  than  of  above 4,000  00 

4,633,417  00 

Balance  subject  to  county  and  municipal  taxation $8,123,975  00 

County  and  special  taxes  on  $4,633,417,  being  property  withdrawn 

from  county  taxation $78,746  21 

State  tax  saved  on  $8,123,975  at  $.364 29,571  27 

Net  loss  to  taxpayers  in  county $49,174  94 

Note. — In  list  of  property  is  included  South  Yuba  "Water  Company,  assessed  at 
$234,040,  of  which  is  $4,000  for  franchise,  which  is  the  only  part  of  that  assessment 
lost  by  the  county,  as  water  companies  are  not  to  be  taxed  by  the  state,  and  if  any 
portion  of  this  assessment  includes  power  plants,  the  same  are  not  segregated  so  that 
the  gain  or  loss  thereon  can  be  computed. 

It  is  provided  in  the  amendment  that  until  the  year  1918  the  state  shall  reimburse 
Placer  county  for  the  net  loss  in  county  revenue  occasioned  by  the  withdrawal  of 
railroad  property  for  county  taxation,  so  that  during  the  next  eight  years  Placer 
county  can  adjust  herself  to  new  conditions. 

In  1909  Placer  county  had  an  assessed  valuation  of  $8,123,975,  exclusive  of  property 
to  be  taxed  for  state  purposes,  and  the  rate  required  to  produce  all  the  revenue  neces- 
sary to  support  the  government  will  be  then  lower  than  is  paid  in  many  other  counties. 


PLUiVlAS   COUNTY. 

Tax  rate,  1909:  Inside,  $2.00  (one  rate  only). 

Total  assessment  roll $5,645,747  00 

Deduct  assessment  of: 

Railroads,  street  railways,  and  car  companies. _        $291,955  00 

Express  companies * 

Telegraph  and  telephone  companies 6,519  00 

Light,  heat,  and  power  companies 110,930  00 

Banks  and  insurance  companies 24,014  00 

Franchises  other  than  of  above * 

433,418  00 

Balance  subject  to  county  and  municipal  taxation $5,212,329  00 

State  tax  saved  on  $5,212,329  at  $.364 $18,972  87 

Deduct  county  and  special  taxes  on  $433,418,  being  property  with- 
drawn from  county  taxation  7,515  90 

Net  gain  to  taxpayers  in  county $11,456  97 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
21.9  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

♦None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  67 

RIVERSIDE  COUNTY. 

Tax  rate,  1909:   Inside,  $1.15;  outside,  $1.75. 

Total  assessment  roll _ -     $30,669,885  00 

Deduct  assessment  of: 

Railroads,  street  railways,  and  car  companies.-     $5,549,776  00 

Express  companies   462  00 

Telegraph  and  telephone  companies 226,723  00 

Light,  heat,  and  power  companies 170,310  00 

Banks  and  insurance  companies 120,940  00 

Franchises  other  than  of  above _-_  * 

6>068,211  00 

Balance  subject  to  county  and  municipal  taxation $24,601,674  00 

County  and  special  taxes  on  $6,068,211,  being  property  withdrawn 

from  county  taxation  $93,154  95 

Deduct  state  tax  saved  on  $24,601,674  at  $.364 89,550  09 

Net  loss  to  taxpayers  in  county $3,604  86 

Net  loss  in  terms  of  tax  rate,  0.14  cents. 

Note. — In  1905  Riverside  county  would  have  gained  $13,747.57,  or  could  have 
raised  the  same  amount  of  money  for  county  purposes,  with  a  tax  rate  10.82  cents 
lower  than  she  had  in  that  year.  This  became  a  slight  loss  in  1908  and  1909,  owing, 
primarily,  to  the  reduction  in  the  state  tax  rate  and  the  raise  made  in  the  valuations 
of  the  railroads.  Riverside  county  has  a  much  lower  tax  rate  than  other  counties,  so 
that  the  apparent  loss  is  insignificant. 

SACRAIVIENTO  COUNTY. 

Tax  rate,  1909:  Inside,  $2.00;  outside,  $1.92. 

Total  assessment  roll  $58,298,532  00 

Deduct  assessment  of: 

Railroad,  street  railway,  and  car  companies. _     $4,576,322  00 

Express  companies  46,500  00 

Telegraph  and  telephone  companies 309,310  00 

Light,  heat,  and  power  companies 1,133,650  00 

Banks  and  insurance  companies 1,055,260  00 

Franchises  other  than  above 7,750  00 

7,128,792  00 

Balance  subject  to  county  and  municipal  taxation $51,169,740  00 

State  tax  saved  on  $51,169,740  at  $.364 ___....._         $186,257  85 

Deduct  county  and  special  taxes  on  $7,128,792,  being  property  with- 
drawn from  county  taxation 117,623  11 

Net  gain  to  taxpayers  in  county $68,634  74 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
13.4  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

SAN   BENITO  COUNTY. 

Tax  rate,  1909:   Inside,  $1.62;  outside,  $1.95. 
Total  assessment  roll  $7,255,145  00 

Deduct  assessment  of: 

Railroads,  street  railways,  and  car  companies..        $488,850  00 

Express  companies  200  00 

Telegraph  and  telephone  companies 22,095  00 

Light,  heat,  and  power  companies 15,335  00 

Banks  and  insurance  companies 110,010  00 

Franchises  other  than  of  above 1,100  00 

637,590  00 

Balance  subject  to  county  and  municipal  taxation $6,617,555  00 

State  tax  saved  on  $6,617,555  at  $.364 $24,087  90 

Deduct  county  and  special  taxes  on  $637,590,  being  property  with- 
drawn from  county  taxation 10,013  20 

Net  gain  to  taxpayers  in  county _ $14,074  20 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
19.7  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  tha^  year. 

♦None  assessed. 


68  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

SAN    BERNARDINO   COUNTY. 
Tax  rate,  1909:   Inside,  $1.15;  outside,  $1.50. 

Total  assessment  roll  $45,379,872  00 

Deduct  assessment  of : 

Kailroad,  street  railways,  and  car  companies- -$14,788,167  (X> 

Express    companies    1,253  (X) 

Telegraph  and  telephone  companies 230,184  00 

Light,  heat,  and  power  companies 1,070,423  00 

Banks  and  insurance  companies 166,512  00 

Franchises  other  than  of  above * 

16,256,539  00 

Balance  subject  to  county  and  municipal  taxation $29,123,333  00 

County    and    special    taxes    on    $16,256,539,    being    property    with- 
drawn from  county  taxation $237,458  38 

State  tax  saved  on  $29,123,333  at  $.364 106,008  93 

Net  loss  to  taxpayers  in  county___ $131,449  45 

Net  loss  in  terms  of  tax  rate,  45.1  cents. 

Note. — San  Bernardino  county  has  always  been  in  the  loser  column  under  the 
amendment.  This  is  due  to  the  enormous  stretches  of  railroads  in  the  county.  But 
the  amendment  provides  that  this  county  shall  be  reimbursed  for  the  losses  in  railroad 
taxes  until  1918,  by  which  time  she  will  have  readjusted  her  finances  to  the  new  con- 
ditions. That  she  is  doing  so  is  seen  by  the  increase  in  property  valuations,  other 
than  railroads,  from  $20,696,665  in  1908  to  $36,967,730  in  1910.  With  compensation 
by  the  state  this  county  will  not  lose. 

SAN   DIEGO  COUNTY. 
Tax  rate,  1909:   Inside,  $1.40;  outside,  $2.00. 

Total  assessment  roll  . $37,481,203  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies..     $3,066,549  00 

Express  companies   _--_ 1,170  00 

Telegraph  and  telephone  companies 186,229  00 

Light,  heat,  and  power  companies 241,223  00 

Banks  and  insurance  companies 73,178  00 

Franchises  other  than  of  above * 

3,568,349  00 

Balance  subject  to  county  and  municipal  taxation $33,912,854  00 

State  tax  saved  on  $33,912,854  at  $.364 : $123,442  78 

Deduct  county  and  special  taxes  on  $3,568,349,  being  property  with- 
drawn from  county  taxation 66,951  51 

Net  gain  to  taxpayers  in  county $56,491  27 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
16.6  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

SAN    FRANCISCO    COUNTY. 

Tax  rate:  $1,964. 
Total  assessment  roll $539,487,347  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies..  $24,979,815  00 

Express  companies   186,238  00 

Telegraph  and  telephone  companies 5,430,876  00 

Light,  heat,  and  power  companies 11,040,961  00 

Banks  and  insurance  companies 16,743,001  00 

Franchises  other  than  of  above 4,380,782  00 

62,761,673  00 

Balance  subject  to  county  and  municipal  taxation $476,725,674  00 

State  tax  saved  on  $476,725,674  at  $.364 $l,735,28r43 

Deduct   county   and   special   taxes   on   $62,761,673,   being   property 

withdrawn  from  county  taxation 1,004,185  76 

Net  gain  to  taxpayers  in  county $731,094  67 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
15,3  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

♦None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  69 

SAN   JOAQUIN   COUNTY. 
Tax  rate,  1909:   Inside,  $1.20;  outside,  $1,576. 

Total  assessment  roll ._ $50,592,150  00 

Deduct  assessment  of: 

Railroads,  street  railway,  and  car  companies. _     $6,072,088  00 

Express  companies   5,594  00 

Telegraph  and  telephone  companies 190,960  00 

Light,  heat,  and  power  companies 900,482  00 

Banks  and  insurance  companies 770,775  00 

Franchises  other  than  of  above * 

7,939,899  00 

Balance  subject  to  county  and  municipal  taxation $42,652,251  00 

State  tax  saved  on  $42,652,251  at  $.364 $155,254  19 

Deduct  county  and  special  taxes  on  $7,939,899,  being  property  with- 
drawn from  county  taxation _ 98,183  32 

Net  gain  to  taxpayers  in  county $57,070  87 

Note. — ^Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
16.3  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

SAN    LUIS   OBISPO   COUNTY. 
Tax  rate,  1909:   Inside,  $1.45;  outside,  $2.00. 

Total   assessment   roll $17,167,465  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies.-     $2,161,222  00 

Express  companies   1,020  00 

Telegraph  and  telephone  companies 55,378  00 

Light,  heat,  and  power  companies 92,335  00 

Banks  and  insurance  companies 117,466  00 

Franchises  other  than  of  above 4,000  00 

2,431,421  00 

Balance  subject  to  county  and  municipal  taxation $14,736,044  00 

State  tax  saved  on  $14,736,044  at  $.364 $53,639  20 

Deduct  county  and  special  taxes  on  $2,431,421,  being  property  with- 
drawn from  county  taxation. 43,625  02 

Net  gain  to  taxpayers  in  county $10,014  18 

Note. — Under  the  amendment,  there  being  no  state  tax.  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
6.7  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 

SAN   MATEO  COUNTY. 
Tax  rate,  1909:   Inside,  $1.15;  outside,  $1.65. 

Total   assessment   roll __....-. $27,075,129  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies.  _     $1,099,674  00 

Express  companies  3.500  00 

Telegraph  and  telephone  companies 53,575  00 

Light,  heat,  and  power  companies 317,075  00 

Banks  and  insurance  companies 28,400  00 

Franchises  other  than  of  above 12.000  00 

1,514,224  00 

Balance  subject  to  county  and  municipal  taxation $25,560,905  00 

State  tax  saved  on  $25,560,905  at  $.364 $93,041  69 

Deduct  county  and  special  taxes  on  $1,514,224,  property  withdranw 

from  coynty  taxation 21.397  41 

Net  gain  to  taxpayers  in  county $71,644  28 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
28.02  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

*None  assessed. 


70  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

SANTA    BARBARA    COUNTY. 
Tax  rate,  1909:   Inside,  $1.40;  outside,  $1.75. 

Total  assessment  roll $32,108,358  00 

Deduct  assessment  of: 

Railroads,  street  railways,  and  car  companies. _     $3,403,535  00 

Express  companies 3,750  00 

Telegraph  and  telephone  companies 221,999  00 

Light,  heat,  and  power  companies 243,241  00 

Banks  and  insurance  companies 163,802  00 

Franchises  other  than  of  above 21,250  00 

4,057,577  00 

Balance  subject  to  county  and  municipal  taxation $28,050,781  00 

State  tax  saved  on  $28,050,781  at  $.364 $102,104  84 

Deduct  county  and  special  taxes  on  $4,057,577,  being  property  with- 
drawn from  county  taxation 63,287  62 

Net  gain  to  taxpayers  in  county $38,817  22 

Note. — ^Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
13.8  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

SANTA  CLARA  COUNTY. 
Tax  rate,  1909:   Inside,  $1.20;  outside,  $1.60. 

Total   assessment  roll $72,002,490  00 

Deduct  assessment  of: 

Railroads,  street  railways,  and  car  companies.-     $3,345,732  00 

Express  companies 1,650  00 

Telegraph  and  telephone  companies 160,280  00 

Light,  heat,  and  power  companies 324,164  00 

Banks  and  insurance  companies 158,678  00 

Franchises  other  than  of  above _  * 

3>990>504  00 

Balance  subject  to  county  and  municipal  taxation $68,011,986  00 

State  tax  saved  on  $68,011,986  at  $.364 $247,563  62 

Deduct  county  and  special  taxes  on  $3,990,504,  being  property  with- 
drawn from  county  taxation 52,590  03 

Net  gain  to  taxpayers  in  county $194,973  59 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
28.6  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 


SANTA  CRUZ   COUNTY. 

Tax  rate:  Inside,  $1.30;  outside,  $1.90. 

Total  assessment  roll $19,739,021  00 

Deduct  assessment  of: 

Railroads,  street  railways,  and  car  companies..     $1,292,083  00 

Express  companies 1,023  00 

Telegraph  and  telephone  companies 57,683  00 

Light,  heat,  and  power  companies 206,234  00 

Banks  and  insurance  companies 117,838  00 

Franchises  other  than  of  above 575  00 

1,675,436  00 

Balance  subject  to  county  and  municipal  taxation $18,063,585  00 

State  tax  on  $18,063,585  at  $.364 $65,751  44 

Deduct  county  and  special  taxes  on  $1,675,436,  being  property  with- 
drawn from  county  taxation 27,021  65 

>    . __ 

Net  gain  to  taxpayers  of  county $38,729  79 

Note, — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
21.4  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

*None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  71 

SHASTA   COUNTY. 
Tax  rate,  1909:   Inside,  $1.50;  outside,  $1.90. 

Total   assessment   roll $15,906,362  00 

Deduct  assessment  of : 

Railroad,  street  railways,  and  car  companies.  _  $3,052,347  00 

Express  companies   860  00 

Telegraph  and  telephone  companies 46,924  00 

Light  heat,  and  power  companies ^     456,72.5  00 

Banks  and  insurance  companies '       46,625  00 

Franchises  other  than  of  above 1,250  00 

3,604,731  00 

Balance  subject  to  county  and  municipal  taxation $12,301,631  00 

County  and  special  taxes  on  $3,604,731,  being  property  withdrawn 

from  county  taxation $61,190  81 

State  tax  saved  on  $12,301,631  at  $.364 44,777  93 

Net  loss  to  taxpayers  in  county.. $16,412  88 

Net  loss  in  terms  of  tax  rate,  13.3  cents. 

Note. — In  1905  Shasta  county  would  have  gained  $13,464.21,  or  could  have  raised 
the  same  amount  of  money  for  county  purposes,  with  a  tax  rate  13.76  cents  lower  than 
she  had  In  that  year,  but  owing  to  the  increase  in  railroad  valuations  this  was  turned 
into  a  slight  loss  in  1909.  One  reason  for  this  is  that  the  assessed  valuation  of  prop- 
erty other  than  that  of  public  service  corporations  has  stood  practically  still.  Another 
reason  is  the  low  state  tax  rate.  A  25  per  cent  increase  on  the  assessed  valuation 
would  turn  this  loss  into  a  gain,  A  state  tax  rate  of  50  cents,  the  average  rate,  would 
have  the  same  effect. 


SIERRA   COUNTY. 
Tax  rate,  1909:   Inside,  $1.75;  outside,  $2,25. 

Total  assessment  roll $2,357,456  00 

I>educt  assessment  of : 

Railroad,  street  railway,  and  car  companies. _.       $220,432  00 

Express  companies * 

Telegraph  and  telephone  companies 4,930  00 

Light,  heat,  and  power  companies * 

Banks  and  insurance  companies 400  00 

Franchises  other  than  above * 

225,762  00 

Balance  subject  to  county  and  municipal  taxation... $2,131,694  00 

State  tax  saved  on  $2,131,694  at  $.364 $7,759  36 

County  and  special   taxes  on  $225,762,  being  property  withdrawn 

from  county  taxation 4,257  87 

Net  gain  to  taxpayers  in  county $3,501  49 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
16.4  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

*None  assessed. 


72  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


SISKIYOU   COUNTY. 
Tax  rate,  1909:   Inside,  $1.35;  outside,  $1.75. 

Total  assessment  roll $18,412,339  00 

Deduct  assessment  of : 

Railroad,  street  railwaj-s,  and  car  companies. __     $4,588,763  00 

Express  companies * 

Telegraph  and  telephone  companies 50,679  00 

Light,  heat,  and  power  coippanies 80,840  00 

Banks  and  insurance  companies 80,449  00 

Franchises  other  than  of  above * 

4,800,731  00 

Balance  subject  to  county  and  municipal  taxation $13,611,608  00 

County  and  special  taxes  on  $4,800,731,  being  property  withdrawn 

from  county  taxation $73,628  08 

Deduct  state  tax  saved  on  $13,611,608  at  $.364 49,546  25 

Net  loss  to  taxpayers  in  county $24,081  83 

Net  loss  in  terms  of  tax  rate,  17.6  cents. 

Note. — In  1905  Siskiyou  county  would  have  saved  $1,667.27,  or  could  have  raised 
the  same  amount  of  money  for  county  purposes,  with  a  tax  rate  2.35  cents  lower  than 
she  had  in  that  year.  In  1908  she  would  have  gained  $6,187,43,  or  reduced  her  tax 
rate  4.66  cents.  This  is  turned  into  a  loss  in  1909.  This  is  accounted  for  by  the  long 
stretch  of  railroads,  the  valuation  of  which  was  raised  by  the  state  board  of  equaliza- 
tion, and  by  the  unusually  low  state  tax  rate.  A  raise  of  30  per  cent  in  the  assessed 
valuation  would  change  this  loss  into  a  gain,  or  without  that  the  loss  would  practically 
disappear  with  a  normal  state  tax  rate  of  50  cents. 


SOLANO    COUNTY. 
Tax  rate,  1909:   Inside,  $1.50;  outside,  $2.00. 

Total  assessment  roll. $22,032,342  00 

Deduct  assessment  of: 
Railroads,  street  railways,  and  car  companies..     $1,931,601  00 

Express  companies 175  00 

Telegraph  and  telephone  companies 70,446  00 

Light,  heat,  and  power  companies 175,150  00 

Banks  and  insurajice  companies 92,427  00 

Franchises  other  than  of  above 10,000  00 

2,279,799  00 

Balance  subject  to  county  and  municipal  taxation $19,752,543  00 

State  tax  saved  on  $19,752,543  at  $.364 $71,899  25 

Deduct  county  and  special  taxes  on  $2,279,799,  being  property  with- 
drawn from  county  taxation 41,379  97 

Net  gain  to  taxpayers  in  county $30,519  28 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
15,4  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

♦None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  73 

SONOMA   COUNTY. 
Tax  rate,  1909:   Inside,  $1.40;  outside,  $1.80. 

Total  assessment   roll $36,205,221  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies.. _     $3,364,510  00 

Express  companies 2,120  00 

Telegraph  and  telephone  companies 245.300  00 

Light,  heat,  and  power  companies 21,525  00 

Banks  and  insurance  companies 209,680  00 

Franchises  other  than  of  above 6,200  00 

3>849,341  00 

Balance  subject  to  county  and  municipal  taxation $32,355,880  00 

State  tax  saved  on  $32,355,880  at  $.364 . $117,775  40 

Deduct  county  and  special  taxes  on  $3,849,341,  being  property  with- 
drawn from  county  taxation 59,956  59 

Net  gain  to  taxpayers  in  county $57,818  81 

Note. — ^Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
17.8  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

STANISLAUS  COUNTY. 
Tax  rate,  1909:  Inside,  $1.10;  outside,  $1.50. 

Total  assessment   roll $22,242,512  00 

Deduct  assessment  of : 

Railroad,  street  railways,  and  car  companies.  _     $3,093,672  00 

Express  companies  575  00 

Telegraph  and  telephone  companies 71,950  00 

Light,  heat,  and  power  companies 124,411  00 

Banks  and  insurance  companies 44,207  00 

Franchises  other  than  of  above 7,344  00 

3,342,159  00 

Balance  subject  to  county  and  municipal  taxation $18,900,353  00 

State  tax  saved  on  $18,900,353  at  $.364 $68,797  27 

Deduct  county  and  special  taxes  on  $3,342,159,  being  property  with- 
drawn from  county  taxation... 49,545  96 

Net  gain  to  taxpayers  in  county $19,251  31 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
10.2  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

SUTTER    COUNTY. 
Tax  rate,  1909:   Inside,  $1.30;  outside,  $1.70. 

Total  assessment  roll $7,652,074  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies...     $1,201,449  00 

Express  companies * 

Telegraph  and  telephone  companies 16,535  00 

Light,  heat,  and  power  companies 70,920  00 

Banks  and  insurance  companies... ___  1.000  00 

Franchises  other  than  of  above __. _  * 

— 1,289,904  00 

Balance  subject  to  county  an^  municipal  taxation $6,362,170  00 

State  tax  saved  on  $6,362,170  at  $.364 $23,158  29 

Deduct  county  and  special  taxes  on  $1,289,904,  being  property  with- 
drawn from  county  taxation 15,488  21 

Net  gain  to  taxpayers  in  county $7,670  08 

Note. — ^Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
12.05  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

♦None  assessed. 


74  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 

TEHAMA   COUNTY. 

Tax  rate,  1909;  Inside,  $1.77;  outside,  $2.15. 

Total  assessment  of_ i $13,410,379  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $2,071,319  00 

Express  companies 250  00 

Telegraph  and  telephone  companies-.-l 30,130  00 

Light,  heat,  and  power  companies 75,025  00 

Banks  and  insurance  companies 46,515  00 

Franchises  other  than  of  above * 

2,223,239  00 

Balance  subject  to  county  and  municipal  taxation $11,187,140  00 

County  and  special  taxes  on  $2,223,239,  being  property  withdrawn 

from  county  taxation $43,473  87 

Deduct  state  tax  saved  on  $11,187,140  at  $.364 40,721  18 

Net  loss  to  taxpayers  in  county $2,752  69 

Note. — ^Under  the  rate  of  taxation  of  1908  Tehama  county  would  have  saved 
$13,361.88,  but  as  the  state  rate  of  taxation  was  lower  in  1909  than  in  1907,  the 
county  paid  that  much  less  to  the  state  on  the  remaining  property,  and  the  increase 
of  railroad  taxes  the  state  gave  back  to  the  county  a  correspondingly  larger  amount 
of  railroad  taxes,  and  these  two  elements  would  cause  the  apparent  loss  of  $2,752.69 
to  this  county  under  the  1909  assessment.  The  state  rate  in  1905  was  49  cents,  and 
under  this  plan  in  that  year  Tehama  county  would  have  saved  $33,553.22.  The  chang- 
ing of  rates  changes  the  result  of  gain  or  loss  to  each  county — the  higher  the  state 
rate  and  the  lower  the  county  rate  the  greater  is  the  gain  to  the  county,  and  reverse 
the  conditions  as  to  rates  and  the  reverse  results  will  follow. 

TRINITY   COUNTY. 

Tax  rate,  1909:  $2.25  (one  rate  only). 

Total   assessment   roll $2,881,330  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies. „  * 

Express  companies   * 

Telegraph  and  telephone  companies $1,241  00 

Light,  heat,  and  power  companies 49,853  00 

Banks  and  insurance  companies 9,209  00 

Franchises  other  than  of  above 100  00 

60,403  00 

Balance  subject  to  county  and  municipal  taxation $2,820,927  00 

State  tax  saved  on  $2,820,927  at  $.364 $10,268  17 

Deduct  county  and  special  taxes  on  $60,403,  being  property  with- 
drawn from  county  taxation 1,189  63 

Net  gain  to  taxpayers  in  county $9,078  54 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
32.1  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

TULARE   COUNTY. 

Tax  rate,  1909:  Inside,  $1.00;  outside,  $1.30. 

Total   assessment  roll $41,241,226  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies.  _     $5,620,015  00 

^  Express  companies 876  00 

Telegraph  and  telephone  companies 92,484  00 

Light,  heat,  and  power  companies 192,612  00 

Banks  and  insurance  companies 155,485  00 

Franchises  other  than  of  above .  * 

6,061,472  00 

Balance  subject  to  county  and  municipal  taxation $35,179,754  00 

State  tax  saved  on  $35,179,754  at  $.364 $128,054  30 

Deduct  county  and  special  taxes  on  $6,061,472,  being  property  with- 
drawn from  county  taxation 72,766  70 

Net  gain  to  taxpayers  in  county. $55,287  60 

Note. — ^Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
15.7  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

♦None  assessed. 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION.  75 

TUOLUMNE  COUNTY. 

Tax  rate:  Inside,  $1.35;  outside,  $1.90. 

Total   assessment   roll $8,094,840  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _        $540,085  00 

Express  companies 350  00 

Telegraph  and  telephone  companies 22,150  00 

Light,  heat,  and  power  companies 367,575  00 

Banks  and  insurance  companies 9,000  00 

Franchises  other  than  of  above * 

•  939,160  00 

Balance  subject  to  county  and  municipal  taxation $7,155,680  00 

State  tax  on  $7,155,680  at  $.364 $26,046  67 

Deduct  county  and  special  taxes  on  $939,160,  being  property  with- 
drawn from  county  taxation 14,058  80 

Net  gain  to  taxpayers  in  county $11,987  87 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
16.75  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

VENTURA  COUNTY. 

Tax  rate,  1909:   Inside,  $1.05;  outside,  $1.40. 

Total  assessment  roll $24,711,242  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies. _     $2,768,628  00 

Express  companies  * 

Telegraph  and  telephone  companies 116,702  00 

Light,  heat,  and  power  companies .  249,860  00 

Banks  and  insurance  companies.... 213,179  00 

Franchises  other  than  of  above '  7,400  00 

3,355,769  00 

Balance  subject  to  county  and  municipal  taxation $21,355,473  00 

State  tax  saved  on  $21,355,473  at  $.364 $77,733  92 

Deduct  county  and  special  taxes  on  $3,355,769,  being  proi>erty  with- 
drawn from  county  taxation 42,799  96 

Net  gain  to  taxpayers  in  county $34,933  96 

Note. — ^Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  rate 
16.3  cents  per  one  hundred  dollars  lower  than  the  total  rate  of  that  year. 

YOLO  COUNTY. 

Tax  rate,  1909:   Inside,  $0.95;  outside,  $1.35. 

Total   assessment  roll. $21,022,881  00 

Deduct  assessment  of : 

Railroads,  street  railways,  and  car  companies.  _     $2,135,329  00 

Express  companies 1,575  00 

Telegraph  and  telephone  companies 61,622  00 

Light,  heat,  and  power  companies 85,875  00 

Banks  and  insurance  companies.. _ _  135,715  00 

Franchises  other  than  of  above * 

2,420,116  00 

Balance  subject  to  county  and  municipal  taxation ___     $18,602,765  00 

State  tax  saved  on  $18,602,765  at  $.364 $67,714  06 

Deduct  county  and  special  taxes  on  $2,420,116,  being  property  with- 
drawn from  county  taxation 26,312  53 

Net  gain  to  taxpayers  in  county -  $41,401  53 

Note. — Under  the  amendment,  there  being  no  state  tax,  the  same  amount  of  money 
as  was  raised  for  local  purposes  in  1909,  could  have  been  raised  with  a  total  tax  rate 
22.2  cents  per  one  hundred  dollars  lower  than  the  total  tax  rate  of  that  year. 

♦None  assessed. 


76  REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXxiTION. 

YUBA  COUNTY. 

Tax  rate,  1909:   Inside,  $2.30;  outside,  $2.70. 

Total  assessment  roll $7,378,994  00 

Deduct  assessment  of : 

Railroad,  street  railway,  and  car  companies. .-     $1,043,179  00 

Express  companies  790  00 

Telegraph  and  telephone  companies 41,780  00 

Light,  heat,  and  power  companies ^ 336,650  00 

Banks  and  insurance  companies 139,850  00 

Franchises  other  than  of  above *  ^ 

1,562,249  00 

Balance  subject  to  county  and  municipal  taxation $5,816,745  00 

County  and  special  taxes  on  $1,562,249,  being  property  withdrawn 

from  county  taxation $36,660  23 

Deduct  state  tax  saved  on  $5,816,745  at  $.364 21,172  95 

Net  loss  to  taxpayers  in  county $15,487  28 

Net  loss  in  terms  of  tax  rate,  26.6  cents. 

Note, — Yuba  county  has  always  been  in  the  loss  column  under  the  amendment. 
But  in  a  normal  year  with  an  average  tax  rate  of  50  cents  her  losses  would  be  very 
small.  Her  assessed  valuation  on  property  other  than  that  of  public  service  corpora- 
tions did  not  increase  from  1908  to  1909.  In  fact,  it  decreased  a  little.  A  20  per 
cent  raise  in  assessed  valuations  would  change  this  loss  into  a  gain. 


Table  Showing  the  Number  of  Copporations  in  Each  Class  of  the  Corporation  License  Tax 

Computed  in  December,  1908. 
Class.  Number. 

Capital  stock  not  over  $10,000 1,607 

Capital  stock  over     $10,000  but  not  over     $20,000 795 

Capital  stock  over       20,000  but  not  over       50,000 4,537 

Capital  stock  over       50,000  but  not  over     100,000 3,128 

Capital  stock  over     100,000  but  not  over     250,000 1,905 

Capital  stock  over     250,000  but  not  over     500.000 1,475 

Capital  stock  over     500,000  but  not  over  2,000,000 -' 1,443 

Capital  stock  over  2,000,000  but  not  over  5,000,000 242 

Capital  stock  over  5,000,000 143 

15,275 

The  above  table  shows  proportions  only,  as  not  all  corporations  had  at  that  date 
made  returns.  But  it  is  to  be  assumed  that  the  same  proportions  hold  for  all  the 
rest. 


'None 


REPORT  OF  COMMISSION  ON  REVENUE  AND  TAXATION. 


77 


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